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IHG Annual Review and Summary Financial Statement 2010

1 Overview 2 Headlines

3 Chairman’s statement

4 Chief Executive’s review

5 Message from the IAHI

We’re a global hotel company – the world’s largest by number of rooms – operating seven well-known brands internationally.

Our Vision is to become one of the world’s great companies. For us this means having great brands which lie at the heart of Great Hotels Guests Love.

We want people to feel good about what we do and how we do it. Around the world, we aim to delight our guests, inspire our people, act responsibly and generate financial returns for our hotel owners and our investors.

This requires:

Great Brandswhich not only stand out, but also stand for something that resonates with our guests.

Great Peoplewho bring our brands to life and give guests every reason to stay with us time and again.

Great Valueswhich bring our people together as a happy, successful and responsible business.

Great Ways of Working which place our guests at the heart of everything we do, and support our hotel owners to do the same.

We’ll be a great company when:

• Guests love to stay with us

• People love to work for us

• Owners love our brands

• Investors love our performance

10

6 Delivering great brands 6 Introduction

7 InterContinental Hotels & Resorts

8 Crowne Plaza Hotels & Resorts

9 Hotel Indigo

10 The Holiday Inn family of brands

12 Staybridge Suites

13 Candlewood Suites

14 Priority Club Rewards

7

Cover image: InterContinental Shanghai Expo, China

InterContinental Bangkok, Thailand

Holiday Inn, Singapore

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15 How we operate 15 Worldwide scale: Our operating system and our business model

16 Our people

18 Global technology

20 Business reputation

22 Corporate responsibility

24 Where we operate 24 Around the world

26 The Americas

28 Europe, Middle East and Africa

30 Asia Pacific

32 Facts and figures 32 Summary financial statement

36 Our senior leadership team

38 Summary Directors’ report

39 Corporate governance

40 Summary remuneration report

44 Investor information

45 Financial calendar and Contacts

8

12 13Crowne Plaza Gurgaon, India Hotel Indigo London-Tower Hill, UK

Staybridge Suites Newcastle, UK Candlewood Suites Orlando, US

9

1

InterContinental Sanya Resort, China

Headlines

2 IHG Annual Review and Summary Financial Statement 2010

Total gross revenue from all hotels in IHG system up 11% to $18.7bn*

Revenue up 6%† to $1,628m

Operating profit before exceptional items:

Group $444m (2009 $363m†)

The Americas $369m (2009 $288m)

EMEA $125m (2009 $127m†)

Asia Pacific $89m (2009 $52m)

Revenue per available room∞ up 6.2%

Total number of rooms operating under IHG brands 647,161 (4,437 hotels)

2,956 hotels operating under the new Holiday Inn standards (89% of the global Holiday Inn estate)

68% of total rooms revenue booked through IHG’s channels or by Priority Club Rewards members direct to hotel

8m new Priority Club Rewards members added (56m members in total)

Final dividend up 21% at 35.2¢ (sterling equivalent of 22p)

* Total rooms revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels (not all attributable to IHG).

† Includes one significant liquidated damages receipt in 2009 in EMEA totalling $3m.

∞ Total system rooms revenue divided by the number of room nights available.

Chairman’sstatement

Performance

Revenue increased 6 per cent to $1.6 billion, with operating profit before exceptional items of $444 million, up 22 per cent. Adjusted earnings per share decreased 4 per cent from 102.8 cents to 98.6 cents.

The Board is recommending a 21 per cent increase to the final dividend for 2010, taking it to 35.2 cents per share. This will give a full-year dividend of 48.0 cents per share, 16 per cent higher than 2009. This converts to a sterling full-year dividend of 30.0 pence, up 15 per cent compared with 2009. Subject to shareholder approval, the final dividend will be paid on 3 June 2011.

Board

I am pleased to welcome Jim Abrahamson and Kirk Kinsell to the Board as Executive Directors. Their appointments were effective from 1 August 2010. Each has retained his existing responsibilities as a member of IHG’s Executive Committee.

Jim joined IHG as President of the Americas region in January 2009 from Global Hyatt Corporation. He has over 30 years of management experience in hotel operations, branding, development and franchisee relations, including 12 years with Hilton Hotels Corporation.

Kirk joined IHG in 2002 as Chief Development Officer for the Americas region, having previously held senior franchise and brand operations roles with the former Holiday Inn Corporation and ITT Sheraton. He was appointed to IHG’s Executive Committee as President, EMEA, in September 2007.

Both Jim and Kirk are highly regarded within the industry and have a deep understanding of the hotel business. This significant operational experience will be of great benefit to IHG’s Board.

Financialpositionandshareholderreturns

Given the uncertainty in the wider economic environment during 2010, we continued with our prudent approach to managing our balance sheet. Careful control over cash has enabled us to reduce our overall net debt position by $349 million to $743 million. No returns above normal dividends were made to shareholders in 2010. Total funds returned since March 2004 amount to more than £3.5 billion.

Outlook

Our people were central to our strong performance in 2010. On behalf of the Board I should like to thank everyone in IHG for their hard work and commitment during the year.

With improving business confidence and corporate profitability, combined with a lower level of hotel openings expected across the industry, forward trends look favourable. Our global scale, attractive brands, powerful system and experienced management team position us well to drive market share and improve margins into the future.

David WebsterChairman

“During 2010 we grew both sales and profits and delivered on our priorities. The recommended 21 per cent growth in the final dividend reflects our confidence in IHG’s prospects.”

David WebsterChairman

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Headlines and Chairman’s statement 3

DearShareholder


In a year when the global hotel industry returned to growth, we continued to improve the strength of our brands and our system. This has resulted in a greater share of the global pipeline and the successful near completion of the Holiday Inn relaunch.

ChiefExecutive’sreview

The economic environment remained uncertain throughout 2010. But as the year progressed the hotel recovery gathered pace, resulting in growth in revenue per available room (RevPAR) in each of our regions and a rise of 6.2 per cent for the Group as a whole.

This led to good growth in revenues and profit for IHG and we continued to make excellent progress against our long-term strategic priorities. Consequently we are well placed to drive market share and improve margins in the years to come.

Drivingmarketshare

The relaunch of Holiday Inn was close to completion at the end of the year. 2,956 hotels are now operating under the new brand standards, which have revitalised our largest brand family globally. Relaunched hotels continue to perform strongly.

The global roll-out of our newest brand, Hotel Indigo, continued as we opened a second hotel in London at Tower Hill and the first Hotel Indigo in Asia Pacific in Shanghai. We signed 25 Hotel Indigos into our pipeline, taking the total number under development to 62.

The power of our system and brands helped us achieve an 18 per cent share of the global pipeline of new-build hotels. During the year we re-entered the Hawaii market with Holiday Inn and formed an innovative alliance with Las Vegas Sands Corp., bringing The Venetian and Palazzo Resorts into the InterContinental system.

In 2010, 68 per cent of rooms revenue came through our reservations channels or by Priority Club Rewards members direct to hotels. We also signed a record number of new Priority Club Rewards members in the year. Total membership now stands at 56 million.

Growingmargins

We kept regional and central costs broadly in line with 2009 excluding the impact of performance-based incentives. This, and our drive to improve the efficiency of the Group, helped increase fee-based margins by 1.1 percentage points.

Our Vision is to become one of the world’s great companies and the actions we have taken in 2010 have reaffirmed that we are on the right path. We continue to focus hard on our strategic priorities to drive market share and improve margins, and with industry trends set to be positive, we look forward to a successful 2011.

“We’ve made excellent progress this year, strengthening our brands and using our scale advantage to drive market share and improve margins. We will continue to focus on investing behind growth and creating value for our shareholders.”

Andrew CosslettChief Executive

“All IAHI members will likely not share the same view of 2010. Some will have seen significant recovery in their markets; others will have continued to face challenges. But no matter where they are on the road to recovery, every IAHI member will share a positive view of our collaboration with IHG.

This year, we launched Celebrate Service, a global tribute to our greatest asset – our people. This collaboration, which started as an idea of past IAHI Chairman Mark Carrier, became a platform for celebrating the contribution of every employee. Building on that success, the IAHI encouraged and supported the introduction of People Tools to all IHG hotels, responding to what our members said was a key challenge: recruiting, developing, and retaining talent.

Another key challenge is driving down costs. In 2010, we introduced one cost-saving innovation, InnSupply, which began as an IAHI initiative. When it became apparent that the resources needed to support a procurement programme were beyond our scope, we approached IHG for their expertise to launch such a programme. InnSupply rolls out in early 2011, and the savings to our owners in dollars and time should be significant.

The benefits of the IAHI and IHG working closely together have never been more apparent. Working together, we will continue to build a profitable future for every owner.”

Bill DeForrest Chairman, IAHI, the Owners’ Association

For further information go to www.iahi.org

Chief Executive’s review and Message from the IAHI 5O

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A profitable future togetherOur Vision is to become one of the world’s great companiesOver the past years we have put the key elements in place to help us fulfil our Vision. We are working side by side with our owners on our shared core purpose of creating Great Hotels Guests Love. We continue to invest in strengthening our brands so that they stand out and stand for something in the hearts and minds of our guests. And we continue to align our organisation behind those brands, helping to inspire pride in the people who bring the brands to life for our guests every day, in every country. These key elements, delivered consistently, will ensure that guests prefer our brands, helping us to win market share.

one of the world’s Great Companies

Our Vision to become great

Great Brands

Great People

Great Values

Great Ways of Working

When we have Delivered by Who share With We will become

Drivingbrandpreference

We are in the people business. It’s the people in our hotels that really bring the brands to life for our guests. So in 2011 we are rolling out a world class suite of tools that give our owners the opportunity to immerse their people in our brands still further. The tools will help them hire the best person for their brand, clarify their understanding of what a guest is looking for in that brand and give them the tools to motivate and recognise their people. These tools will help us to drive consistency in brand delivery and help our owners to engage, develop and retain good people.

Globalopportunities

We are always looking for new opportunities around the world. There are, however, huge opportunities for our existing brand portfolio. We are focused on quality not quantity. The Holiday Inn relaunch has been one of the biggest initiatives in hotel history and we are now preparing to refresh Crowne Plaza. We have been pleased with the results of our boutique brand, Hotel Indigo, this year and are looking forward to an escalated roll-out next year. Our brands are benefiting from the opportunities opening up in emerging markets where we are building a strong position.

Andrew Cosslett

Chief Executive

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Great Hotels Guests Love

Therightpeople

The experience we create for our guests starts with our people. Getting the right people with the right training to deliver a distinctive experience for each of our brands is the aim of our People Tools (see page 16).

Therightenvironment

The right people need the right environment to create great guest experiences. This was the main goal of our $1 billion relaunch of Holiday Inn. The global refresh, the largest ever in the hospitality industry, has driven a significant improvement in guest satisfaction and revenue per available room (RevPAR) across our hotels around the world. Since 2005 we have also added 1,200 hotels to the portfolio and removed around 1,000 others that were not up to high enough standards (see pages 10 and 11).

Great brands lie at the heart of Great Hotels Guests Love. Guests want our brands to offer something distinctive and special. And they want to feel certain they will enjoy the same high-quality experience every time. Providing guests with this confidence underpins our brand strength, as does the training and dedication of our people. Great brands, combined with the scale and power of our system, allow us to grow return on investment and increase hotel owner satisfaction.

Deliveringgreatbrands

“Our powerful system, the quality of our hotels and ability of our people enable us to deliver a consistently great guest experience. That means our brands are ideally placed to outperform our competitors.”

Tom SeddonChief Marketing Officer

Ourpowerfulsystem

In addition to a great guest experience, a global hotel brand needs a powerful global operating system and marketing strength to attract and retain customers. IHG’s $1 billion system fund attracts guests and drives revenue for owners in many ways. These include our reservations channels, regional sales teams and the world’s largest loyalty club scheme, Priority Club Rewards, with 56 million members. Our system is the reason we attract over 146 million room nights per annum and five rooms are booked with us every second. It also supports successful programmes such as our $100 million ‘Stay You’ campaign for Holiday Inn (see page 11).

Standingforsomethingspecial

Brands become great when they stand out and stand for something that people remember and choose first. Over the next eight pages we set out how we are developing our brands to create Great Hotels Guests Love and become one of the world’s great companies.

Holiday Inn Pattaya, Thailand

InterContinental® Hotels & Resorts

Great brands 7G

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InterContinental Mendoza, Argentina

Did you know?

We were awarded

‘Best Business Hotel Brand in

the World’ and ‘Best Business

Hotel Brand in Europe’

by Business Traveller

in a 2010 poll.

more on the web: www.ihgplc.com

In the know

We’ve been on the international scene for decades, so no-one knows the world like we do. We love to share our knowledge with our guests and they love our understated service and style.

Located in more than 60 countries, we’ve got all the local insight that comes with over 60 years of experience.

Our people know that well-travelled, affluent guests want to connect with the essence of a location. So it’s every team member’s desire to help guests enjoy authentic and enriching experiences that broaden their outlook and make the most of their time with us.

To help guests get ‘in the know’ we offer Destination Videos, part of InterContinental’s Concierge programme. They’ve received over 4.5 million views on our website and YouTube. Our global concierge Insider Guides are also available on a free iPad app at www.intercontinental.com/insiderguides

Hotels in Region Hotels Rooms pipeline

Americas 56 19,120 5EMEA 64 20,111 24AsiaPacific 51 19,198 31Total 171 58,429 60

www.intercontinental.com

Being local

We opened nine new InterContinental hotels this year, with flagship properties in Shanghai and Nanjing, China; New York, US; and Mendoza, Argentina. This took our global estate to 171 hotels. We also signed agreements to open new hotels in Cartagena, Colombia; Osaka, Japan; Beijing, China; and Kuala Lumpur, Malaysia, boosting our pipeline to 60 hotels.

This planned growth in strategic locations across the globe is key to expanding our knowledge of the world and making our brand more accessible to our guests.

Extending the brand

In 2010 InterContinental launched its first ever China brand campaign. This featured our new properties the InterContinental Sanya Resort, InterContinental Shanghai Expo and InterContinental Nanjing.

The campaign reached around 25 million people across Greater China.

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Crowne Plaza® Hotels & Resorts


Did you know?

Travel buyers rated

Crowne Plaza the No.1

upscale brand in Business

Travel News’ annual US Hotel

Chain Survey 2010.

Leading growth

Crowne Plaza is the fourth largest upscale hotel brand in the world. It also has the most hotels in the development pipeline of any upscale brand globally. We signed hotels in 2010 in St. Petersburg, Changchun, Amsterdam and we opened in Bangkok. We’re opening more than 120 hotels over the next few years and in 2011 we’ll be developing plans for a refresh of the brand, further improving the guest experience.

Official Partner of BMW Motorsport

Crowne Plaza has joined forces with BMW Motorsport in a three-year global partnership to help us drive revenue by reaching more customers than ever before. It’s a strong brand fit as we do business in the same markets and share the same commitment to service. We also share the same customers, together offering them a great lifestyle choice.

We love to make sure that our guests have fun when they stay with us. We do this by combining the very best facilities with great service, helping our guests get more from their trip beyond work.

Crowne Plaza Gurgaon, India

Celebrate your stay

Crowne Plaza Hotels & Resorts is our upscale brand of hotels located in urban centres, gateway cities and resort destinations across more than 56 countries. We are recognised as The Place to Meet as we focus on providing a better experience for both meeting planners and their attendees. We also know a good night’s sleep only truly begins once you’re able to shut out the world and switch off, which is why we’ve introduced a popular dedicated sleep programme called Sleep Advantage®.


Americas 209 57,073 27EMEA 98 22,941 25Asia Pacific 81 26,141 71Total 388 106,155 123

www.crowneplaza.com

Page header 9

Hotel Indigo®

Great brands 9G

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Did you know?

Hotel Indigo and singer/songwriter

Natasha Bedingfield teamed

up last year to uncover the

best neighbourhood spots

across America.

Hotel Indigo London-Tower Hill, UK


Refreshingly local

We love the fact that we’re different, right down to our local take on design. We’re all about neighbourhoods and take every opportunity to share the colour, ambience and flavours of our localities with our guests.

Hotel Indigo combines the individuality of a boutique hotel with the consistency and reliability of a branded hotel. We go out of our way to make our neighbourhoods easy to discover and appreciate. The neighbourhood setting, modern design and our commitment to inspired service are what set Hotel Indigo apart. That’s why we appeal to the upscale guest who is well-travelled, has an eye for design, an appreciation for art and is looking for something different.


Americas 35 4,254 46EMEA 2 110 11AsiaPacific 1 184 5Total 38 4,548 62

www.hotelindigo.com

Our youngest brand

We’ve only just celebrated our sixth birthday, but our youngest brand is growing at great pace. We finished the year with 38 hotels and have over 60 more in the pipeline. We’re set to open in major cities such as Madrid, Lisbon, Vancouver, Mexico City, Glasgow, New Orleans and Berlin. We’ve also now launched the brand in Asia Pacific with Shanghai on the Bund, which will be followed by openings in Taipei, Bangkok and Jakarta. This year we opened a second London property, Hotel Indigo at Tower Hill, in the centre of the City’s Square Mile, and our fourth hotel in New York State.

Pulling power

In 2010, J.D. Power and Associates featured Hotel Indigo for the first time in their customer satisfaction reports. Guests at new brand hotels, such as Hotel Indigo, report they’ve been happier with their stay over the past year than those staying with more established brands.

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Holiday Inn®, Holiday Inn Express® and Holiday Inn Club Vacations®

Holiday Inn

We’ve always been known for our friendly service, comfort and value. Now we’re completing our worldwide relaunch, our business and leisure travellers can expect even better quality and service.

Our new identity, contemporary lobbies and refreshed guest rooms are all designed to help guests relax and simply be themselves.


Americas 812 144,683 187EMEA 325 52,945 41Asia Pacific 104 29,597 85Total 1,241 227,225 313

www.holidayinn.com

Holiday Inn Express

One of the fastest growing hotel brands, Holiday Inn Express offers convenience and comfort at great value. Like Holiday Inn, we’ve almost completed the brand’s relaunch. This means our guests can expect the fresh, clean and comfortable stay they’re used to, with improved service and a more contemporary feel – whether on business, on holiday or just passing through.


Americas 1,847 159,867 407EMEA 198 23,706 47Asia Pacific 30 7,655 40Total 2,075 191,228 494

www.hiexpress.com

ResortsinRegion Resorts Rooms pipeline

Americas 6 2,892 0Total 6 2,892 0

www.hiclubvacations.com

Holiday Inn Club Vacations

We provide a fun and relaxing environment where memorable vacations are created and shared among family and friends time and again.

Families have been vacationing with Holiday Inn for more than 50 years. The new Holiday Inn Club Vacations brand provides the same great value and family-friendly atmosphere in a vacation resort setting.

Championing the real you: Our friendly people love to make our guests feel totally comfortable,

Every second 3 guests check into our hotels.Every week 2 Holiday Inn Express hotels open.Every year 120 million people stay at our hotels.

Following the ‘Stay You’ campaign, awareness of the brand rose by 6 percentage points in the US and Canada last year.

Did you know?

We won ‘Hotel Brand of the

Year’ for the new Holiday Inn

Express Guest Room Design

at the 2010 European Hotel

Design Awards.

Official hotel services provider to the London 2012 Olympic and Paralympic Games.

Great brands 11

Staying powerWe’ve all but completed the $1 billion Holiday Inn relaunch, the biggest-ever project of its kind in the hospitality industry. This was quite an achievement, especially in such a tough global economic climate. At the end of 2010, almost 3,000 hotels were operating under the new Holiday Inn standards, approximately 90% of the global Holiday Inn estate. The refreshed hotels offer modern spaces, friendly service and a great night’s sleep in 72 countries worldwide.

The benefits of the investment are already starting to be seen by owners. Our aim was to deliver between 3% and 7% RevPAR outperformance for relaunched hotels. Results are at the top end of this target. RevPAR growth for US hotels relaunched for more than one year was 6 percentage points higher than those we hadn’t relaunched. Global RevPAR is 5 percentage points higher at relaunched hotels.

Growing our presence

It has been a year of growth with Holiday Inn returning to Hawaii and the opening of our first new-build in Mumbai, India. Holiday Inn Express launched in India, Singapore and Malaysia

and we extended the pipeline in China, Turkey, Germany and France. At Dubai Airport we opened the largest Holiday Inn Express in Europe, Middle East and Africa.

London 2012 Olympic and Paralympic Games

We continued our preparations to welcome the world for London 2012. We announced a number of initiatives to help the organising committee, LOCOG (see page 29), and are preparing to open a new Holiday Inn around the Olympic Park. Two other Holiday Inns will open next year in London as we prepare to welcome guests in the run-up to the Games.

Stay You.™

In May 2010 we kicked off a $100 million global advertising campaign, inviting people to ‘Stay You’ or simply be themselves. We advertised on TV for the first time in Germany and also advertised across the US, UK, Canada, Latin America and Australia with print and digital campaigns in Mexico and Asia. More details of our Great Wall of China activity can be seen on page 31.

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Holiday Inn Club Vacations – a fun and relaxing environment where memorable vacations are created and shared among family and friends time and again.

Holiday Inn Hotels & Resorts were voted ‘Best Mid-Market Hotel Brand in the World’ and ‘Best Mid-Market Hotel Brand’ in Asia Pacific for the 10th consecutive year.

whether they arrive in their suit, or shorts and a T-shirt.


‘Stay You’ China’s largest

photo exhibition on the

Great Wall.


Like family

Our upscale properties offer guests who would like an extended stay a choice of studio, one-bedroom or two-bedroom/two-bath suites with fully equipped kitchens and separate sleeping and work areas. We also invite them to join our hotel teams and other guests for social activities that make them feel comfortable, making them feel like family.


Americas 183 20,014 96EMEA 5 748 5Total 188 20,762 101

www.staybridgesuites.com

Our brand abroad

Staybridge Suites has grown every year in the Americas since its launch in 1998. We’re also now offering our all-suite concept in international markets such as Cairo, Abu Dhabi, St. Petersburg, Liverpool and Newcastle. Following exciting new signings in 2010, our 101-strong pipeline will extend the brand in markets such as Kuwait and Lebanon. One of the highlights will be our prominent position at the London 2012 Olympic Village in Stratford.

Times Square debut

In 2010 we made our debut in New York City’s Times Square. The property is within walking distance of Manhattan’s hub, the Jacob Javits Convention Centre, Broadway, Madison Square Gardens and Central Park.

Staybridge Suites also made its debut in Querétaro, central Mexico and we opened five properties across the US, including Oklahoma City and Seattle, Washington.

We love our guests to feel like family and our hotels to feel like home.

Staybridge Suites Augusta, Georgia, US

Did you know?

Staybridge Suites team

members have raised funds

to complete four villas at

Give Kids The World

Village in Orlando.

Staybridge Suites®

Page header 13

Candlewood Suites®

Candlewood Suites Hot Springs, Arkansas, US

Did you know?

Candlewood Suites

was the first mid-priced

extended stay hotel

in New York City.

Great brands 13G

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Feel free

We love giving our guests all the essentials they need for a home-like stay at great value. We give them room to be themselves and are always there when they need us.

At Candlewood Suites our guests want to feel trusted and free to do what they want in their own space. Our hotels offer spacious studio and one-bedroom suites with fully equipped kitchens and a large work area which our guests often personalise to their liking. The Candlewood Cupboard is open 24 hours and is the only hotel convenience store which operates on an honesty system.


Americas 288 28,253 120Total 288 28,253 120

www.candlewoodsuites.com

Growth flows from Texas

Our US and Canada-based Candlewood Suites brand added 13 new hotels in Texas during the first six months of 2010. We are now open or about to open in 50 locations in the State. In total, 35 Candlewood Suites opened in the year and our pipeline remains bigger than any other brand in the midscale extended stay segment of the market.

Habitat for Humanity

Candlewood Suites has sponsored 10 Habitat for Humanity Home builds, creating home ownership opportunities for low-income families. The 10 completed homes are located across the globe in Detroit, Michigan; Dallas and Houston, Texas; Atlanta, Georgia; Alocqauca, Mexico; and Karjat, India.

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Priority Club® Rewards

Our new look


Unleash the power of your points

The world’s first and largest hotel loyalty programme, Priority Club Rewards, offers members more ways to earn and redeem points than any other hotel scheme.Our members have unparalleled levels of freedom and choice, including our industry-leading Hotels Anywhere scheme and the ability to get rewards faster with Points & Cash.

56 million membersOver 600,000 new members every monthwww.priorityclub.com

Value in loyaltyPriority Club Rewards is more than a loyalty scheme. It’s a dynamic and international brand in its own right. The scheme drives over 40% of our total revenues by attracting guests to our hotels and gaining their repeat business.

Incentives trigger growthIn 2010 the brand continued to grow as we added almost eight million new members and generated 15% more revenue. Our greater flexibility was a key attraction, allowing guests to redeem points at any hotel, book airline tickets to anywhere in the world or combine Points & Cash for other rewards.

By offering this freedom of choice, Priority Club Rewards stands out in its market. Our members know that:• points never expire;• rewards nights have no restricted dates; • hotel, travel, merchandise and entertainment rewards are also offered.

Attracting guests and ownersGuests love Priority Club Rewards. And our owners see it as a huge attraction of our operating system. This helps us to expand our estate in markets where we know we can create demand. One example in 2010 was Holiday Inn’s return to Hawaii, one of the most requested destinations by our members (see page 27).

Developing an award-winning brandFrequent travellers consistently vote Priority Club Rewards as their favourite hotel loyalty programme. The scheme has been named Best Hotel Rewards Program in the World by Global Traveler magazine readers for six consecutive years and Best Hotel Loyalty Program by Business Traveler magazine for four years in a row. In 2011 we will relaunch the scheme with a fresh new look.

How we operate

OuroperatingsystemOur global ‘system’ is the engine room of the business. It brings guests to our hotels and persuades them to prefer our brands. It also drives hotel reservations and revenue for our owners, a key reason why they choose to develop hotels with us. To make our scale really count, we focus on the biggest markets and target our resources at opportunities that will deliver the best returns. This has helped us grow our industry-leading share of the global branded development pipeline.

Worldwidescale

Great brands and How we operate 15O

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OurbusinessmodelWe run hotels in three ways: as a brand franchisor; a hotel manager of our brands; and as brand owner. Our low-capital business model means we own only 15 of our hotels today. Our focus is on franchising and managing hotels. More than 3,000 hotel owners now choose our brands in over 4,400 hotels and over 640,000 rooms around the world.


Brand Marketing and distribution

Staff Ownership IHG capital IHG income

Franchised This is the largest part of our business: 3,783 hotels operate under franchise agreements

IHG IHG Third party Third party None Fee % of rooms revenue

Managed We manage 639 hotels worldwide

IHG IHG IHG usually supplies general manager as a minimum

Third party Low/none Fee % of total revenue plus % of profit

Owned and leased We own 15 hotels worldwide (less than 1% of our portfolio)

IHG IHG IHG IHG High All revenues and profits

IHG’s system delivers

68% of total rooms

revenue

System FundAnnual fund

totalling $1.1bn

Loyalty programmePriority Club Rewards, the largest in the industry, with

56 million members

Web presence11 local language websites and one of the most active

in industry on the web

Sales forceGlobal

sales team of more

than 8,000

Market coverage

Leadership positions in

15 of the 20 largest hotel markets, more than any other company

Reservations systems

10 call centres around the world,

covering 12 languages

Brand portfolio

7 hotel brands covering all major

segments

Scale4,437 hotels.

Over 146 million room nights per annum

How we operate

We have set out a clear Vision to become one of the world’s great companies. Motivated and skilled people are essential to our success because they bring our brands to life. Our people tell us they love our brands, believe in our strategy and are proud to work for us. This is allowing us to deliver consistently high standards of service and higher revenues for hotel owners, says Tracy Robbins.

Ourpeople

Brandsattheheartofourbusiness

Great brands are at the heart of everything we do. Our people are critical to our brand success as their passion, values and skills are crucial to the guest experience. This year we further equipped our people to support the brands through development of our People Tools. These help us to hire, train, involve and recognise employees against the values of each brand whether it’s Holiday Inn’s friendliness or InterContinental’s understated service and style (see the brand pages 7 to 14). These tools were developed for our owned and managed estate and received great feedback. Now working in partnership with hotel owners and the IAHI, we will offer them to all our hotels across the world.

“We’re not just a hotel business providing rooms – we’re a people business providing memorable experiences for our guests in 100 countries and territories. We attract and develop the best people using our People Tools and by creating a workplace in which our people can be themselves and are valued for their contributions. When people love their jobs and feel proud of where they work, guest satisfaction increases and we drive higher returns for owners.”

Tracy Robbins Executive Vice President, Human Resources & Group Operations Support

InterContinental New York Times Square, US

Proud to work for IHG

Our employee survey in October showed that more of our people than ever understand our people strategy and love being part of IHG. Over 96,000 people sent us their views with 93% saying they are proud to work for us. Meanwhile, 91% of our people understand our core purpose to create Great Hotels Guests Love. The survey also showed that our people feel more engaged with the company than they did a year ago.

Working smarter

Ensuring our people have the right skills and knowledge gives us a competitive advantage. This year we developed the IHG Way of Sales to build a common way of working across the sales discipline, build sales capacity and drive hotel performance. This comprehensive online training for hotels ranges from quality programmes to systems and revenue management. Today, we offer more online learning experiences for our employees than ever before, helping hotels control costs and reduce time away from the job.


SharonHoliday Inn

Edmond Tong: Events Operations Director, InterContinental Hong Kong

Our people 17H

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Did you know?

In our October employee

survey a record 93% of

our people said they’re

proud to work for us.

Recruitinganddevelopingtalentedpeople

We expect to open almost 1,300 hotels in the next few years. To deliver Great Hotels Guests Love we will need to recruit around 160,000 people for our corporate offices and managed hotels. There will also be even more opportunities available in our franchised hotels.

We use our online recruitment system at www.ihg.jobs, as well as our Academy partnerships (see page 22), in different regions to match the right candidates against the right roles. Over 1.8 million people visited the site during 2010 and more than a million potential candidates have expressed an interest in working for us.

Our commitment to employees is to give them great training and to regularly review their progress so everyone will fulfil their potential.

Great brands have great leaders

This year we launched the Leadership Academy for members of our Leaders Lounge, an award-winning online community which shares ideas and best practice techniques. The new Academy gives our leaders the opportunity to invest time in comprehensive 15-20 minute online training programmes, available on-demand. Meanwhile, the Leaders Lounge continued the success of the previous year with 88% of eligible employees visiting the site each month.

The BEST place to learn

The awards we win show that our People Tools are best in class and that we are a great company to work for. Among our awards this year, we were named the ‘World’s ‘BEST’ Learning & Development Organisation’ by the American Society for Training and Development. We were also named as a Sunday Times ‘Best 25 Big Companies’ to work for.

Celebrating Service

A simple ‘thank you’ can go a long way. That was our experience in July 2010 when around 3,000 hotels and offices celebrated examples of great service. Simple thank you notes were written by our colleagues worldwide and over 1,500 stories of great service were celebrated. These ranged from the manager who hosted a wedding for 130 people with an hour’s notice, to one of our housekeepers who got a guest to a meeting on time by washing and ironing a stained shirt in just ten minutes.

2010 Awards

• ‘Best 25 Big Companies’ to work for – Sunday Times 2010

• ‘Britain’s Most Admired Companies’ – Leisure and Hotels 2007, 2008, 2009 and 2010

• ‘World’s ‘BEST’ Learning & Development Organisation’ – American Society for Training and Development 2010

• ‘Innovation in Recruitment’ – Personnel Today 2010

Winning Ways

These five behaviours define how we work together to create Great Hotels Guests Love.

Do the right thing

Show we care

Aim higher

Celebrate difference

Work better together

InterContinental Shenzhen, China


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How we operate

Growingtomeetdemand

Technology systems are the foundation for efficient sales and distribution. Over the past few years demand for technological solutions in all areas of our business has grown massively. We are now handling approximately 15 billion interactions with our business every year, more than twice the number three years ago. At the same time we look to technology to help reduce IHG’s operating costs.

Innovatinginthemobilespace

Nothing demonstrates our ability to anticipate demand better than our pioneering use of mobile and smartphone services. We were the first in our industry to introduce a popular mobile booking website. This is now available in eight different languages. We have added further innovations such as allowing mobile customers to check availability and book rooms in nearby hotels as well as view local maps and directions.

The popularity of ‘location-based services’ is massive and gives us considerable revenue opportunities. In December 2009 we achieved $400,000 in rooms revenue from mobile bookings globally. By the following December we were achieving over $3.6 million for the month. Euromonitor estimates that as many as 50% of the European population will be using these types of services by 2015 and the global picture is equally exciting. Together with other mobile offerings, such as our Priority Club Rewards app (see opposite), we are well placed to differentiate ourselves in this competitive marketplace.

The effective use of the best technology is essential to our Vision of becoming one of the world’s great companies. We are taking the industry lead in different areas, such as smartphone services, and are increasingly patenting our inventions and building a reputation as an innovative company.

Globaltechnology

“We continually push the boundaries of technological innovation to stay ahead in our sector and meet the expectations of our people, owners and guests. We anticipate trends and are fast to offer solutions. It means we support our brands by making our services more accessible and attractive to guests. It also makes our business easier to operate and more efficient, supporting our promise to create Great Hotels Guests Love.”

Tom ConophyChief Information Officer

Mobile check-in

Holiday Inn has introduced cutting-edge technology to allow guests to unlock their hotel room door with an audible tone from their mobile phone. Trialled at the Holiday Inn Chicago O’Hare and the Holiday Inn Express Houston Convention Center, the technology bypasses front desk check-in and has been very well received by guests. We are now looking to expand the pilot test globally over the next 12 months.

Searching for a beach hotel?

This year we introduced BOSS (Bottom-Up Optimized Search Strategy), a patent pending technology that works behind the scenes to revolutionise the way people search for hotels. We are handling over 50 million of these searches every day.

BOSS turns conventional searching on its head. Traditionally, guests are prompted to search for a specific property or dates, repeating the search until they have narrowed down what they are looking for.

BOSS will enable guests to determine their own search criteria, whether a beach hotel or a major city, giving them the results they want quickly and easily. By the end of 2010, 30% of all IHG room searches were undertaken by BOSS, with 100% planned by the end of 2011.

Along with improving search capabilities, BOSS is an important element in helping us build IHG’s reputation as a great company by creating industry-changing patentable inventions.

Better customer targeting

Magic, the marketing tool that helps us tailor campaigns to consumers, is producing great results for the business. This year we used over 150 million guest profiles and 56 million Priority Club Rewards members to produce more targeted marketing campaigns.

Over the year, Magic campaigns generated $200 million in revenue, as compared to $90 million in 2009. We are also using Magic for a new initiative, Guest Connect. Three days before their stay, guests are sent a pre-stay email with information about the hotel they are visiting and our promotions. The system allows hotels to select the most appropriate promotions for their location, enabling our people to give guests a more personal service.

Unique guest services

InterContinental hotels are pioneers in their use of the latest technology to deliver Great Hotels Guests Love. We are the first hotel brand to offer destination-specific online concierge services globally and this year launched our free Concierge Insider Guides app. The app is designed specifically for the Apple iPad and we are the first major hotel brand to make such an app available.

Our guests have always enjoyed the local knowledge of our concierge teams. With a simple download, our guests can now prepare to enjoy a richer travel experience by tapping into the collective knowledge of InterContinental concierge teams in more than 140 destinations.

Priority Club Rewards app In April 2010, we launched a Priority Club Rewards app for the Apple iPhone which has already been downloaded nearly 200,000 times. And in July 2010, we launched the Priority Club Rewards app for Google Android phones.

Global technology 19H

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The concierge team at InterContinental Hong Kong ready to use their iPads to provide guests with local recommendations.

Did you know?

In 2010 we were second in

InformationWeek’s top

500 companies. We were

also recognised as a

top 100 company by

the Chief Information

Officer 100 Awards.

Priority Club Rewards Free Nights campaign


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How we operate

A great corporate reputation is central to our ability to deliver Great Hotels Guests Love. Whether corporate governance, risk management, legal, health and safety, internal assurance or corporate responsibility, our stakeholders rely on us to do the right things.

Businessreputation

Corporategovernance

We are committed to maintaining the highest standards of global corporate governance. We achieve this by providing the right leadership, strategic oversight, knowledge tools and controls for our people so we fulfil all expectations, deliver a trusted service for guests and continue to drive value for our shareholders.

Ultimate responsibility for having the necessary robust processes and policies in place rests with the Board of Directors. Our Board has an excellent balance of skills and experience, bringing together expertise in areas such as marketing, hotel management, franchising, strategy, finance and remuneration.

The Board is supported by a range of Committees, including Audit, Remuneration, Corporate Responsibility, Nomination and Disclosure, as well as the functional teams of Global Internal Audit, Risk Management, Legal and Company Secretariat.

Responsibleculture

Responsibility extends from the boardroom to every hotel guest room so we equip the 335,000 people who work in our hotels and corporate offices around the world to all live by our responsible business culture. We have embedded policies in our day-to-day operations, including our Code of Ethics and Business Conduct, Competition and Anti-Bribery policies. These are regularly and clearly communicated throughout our business. As our Code of Ethics states, IHG’s reputation is built on the trust and confidence of all our stakeholders. This underpins our determination to be one of the world’s great companies.

Managementofrisk

Having an accurate and up-to-date risk strategy is essential to managing our key risks. We continually review our Global Risk Register and agree actions to mitigate our current or emerging risks. The Risk Management team reports twice a year to the Board, Executive and Audit Committees.

Members of our executive team and other senior management are responsible for managing risk across our offices and hotels and for applying strategies, prioritising awareness and delegating responsibility to cope with events that could undermine the reputation of the Group and our brands. This involves, for example, safety and security, protection of personal and sensitive data and making the most of our use of third-party intermediaries.

Boardinsight

We make sure that our non-executive Board members have first-hand knowledge of the challenges and opportunities we face in our business front-line. During the year we held two non-executive visits to the Middle East and one to Atlanta, and we’ll be hosting a tour of Greater China in 2011. Visits like this supplement the range of business information we provide, ensuring Directors have up-to-date insight into our expanding global business.

“Having a great business reputation is a core asset. It helps us delight guests and attract shareholders. It’s also how we build trusting relationships with business partners, maintain the confidence of the financial community and ensure we’re an employer of choice.”

George Turner Executive Vice President, General Counsel and Company Secretary

Business reputation and responsibility 21

Stayingsafe

Providing our guests and visitors with an environment in which they feel safe and secure is the main focus of the Risk Management team. Our emphasis on responsibility is core to promoting, maintaining and protecting the global reputation of the business. The team manages safety and security risks and ensures that our hotels comply with our own high standards, as well as local laws.

Our global standards have been recognised by the UK’s Chartered Institute of Environmental Health (CIEH) which this year awarded us its first global corporate membership. All our safety training, from Intermediate or Advanced Foundations to online risk training sessions, will be accredited or endorsed by the CIEH. Graham Jukes, CIEH Chief Executive, described us as “a responsible corporate citizen – one that puts the safety of its customers and employees at the centre of everything it does.”

Integrityofinformation

With operations as complex and global as ours, spanning 100 countries and territories, robust privacy and data protection procedures are vital.

Our privacy programme is designed to keep customer information confidential. In addition to our own strategy in 2010 we began to roll out compliance to Payment Card Industry (PCI) data protection standards. This achieved PCI certification in our corporate offices, data centres and owned hotels. We are providing support and expertise as well as encouragement for both the managed and franchised estate to meet the same standards.

Dynamicassurance

Global Internal Audit plays an important role in protecting our reputation. The team, via our dynamic risk assessment process (DRA), provides objective assurance and advice by developing an informed assessment of the Group’s strategic and core risk profile and focusing resource on audit testing where risk matters most. The DRA was crucial in providing independent ongoing assurance to the Audit Committee that appropriate controls were in place in 2010.

Hotel safety framework

The Safe Hotel wheel below illustrates the groups of risks identified and actively managed by IHG’s risk managers around the world. The risk team work with hotels and their management teams in order to minimise such risks and keep hotels safe and secure.

Our holistic approach to risk means we are able to maintain and develop management strategies to assess and control individual types of risk. This has involved developing policies, standards and guidelines, raising awareness and training staff on controls and systems as well as reviewing and reporting on progress. These management activities are described on the Manage Risk wheel below.

Did you know?

The risk management and

training pages on our

intranet attracted

187,000 hits from our

people last year.

InterContinental Nanjing, China

SAFE HOTEL

SECURITYCRISIS &INCIDENT

FIRE SAFETY

LEISURESAFETY

GUEST SAFETY

FOOD SAFETY

STAFF SAFETY

MANAGERISK

RISKPROFILE

POLICY &STANDARDS

REVIEW & REPORT

WAYS OFWORKING

RISKFINANCING

TRAINING& COMMS

OPERATE& CONTROL


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How we operate

Corporate responsibility (CR) is integral to the way we do business. Our focused approach helps us with our strategy to innovate and collaborate with stakeholders. This helps us create economic opportunities for communities and protect the environment. It also allows us to manage costs, drive revenue and be prepared for the future.

Corporateresponsibility

Agoodbusinessproposition

We know that great companies care about the environment in which they operate. We also know that with over 4,400 hotels worldwide and almost 1,300 in the development pipeline, we have a tremendous opportunity to make a difference. But making a difference also makes good business sense. Our CR strategy focuses on the two areas where we can make the most difference: protecting the environment; and creating economic opportunities for our communities.

When we work with stakeholders to cut carbon emissions, for example, we do it not only because it is good for the environment but also to help us cut costs and drive value for shareholders. Similarly, when we open almost 1,300 hotels over the next few years we will be investing in training and development for almost half a million people. This will support local economies as well as help us to attract a talented and committed workforce.

Innovationandcollaboration

We achieve our business objectives by innovating and collaborating. A great example is Green Engage, our online sustainability tool.

This industry-leading system allows hotels to track, measure and report on their energy, water and waste. It enables hotels to identify significant cost savings and reduce their environmental impacts without compromising the guest experience. Since its launch in 2009, over 1,000 hotels and 2,000 individuals have registered to use the system, creating a green community within IHG. The effectiveness of Green Engage is also demonstrated by the fact that LEED (Leadership in Energy and Environmental Design) now endorses the system.

Supportingourcommunities

With over 4,400 hotels in 100 countries and territories, we are well placed to lead from the front in promoting responsible tourism. Through our new Community Strategy, developed in 2010, we are continuing our efforts to generate local economic opportunities, in particular through the IHG Academy.

Through Academy partnerships, we have joined forces with education providers and community organisations to provide hospitality training and job opportunities in the communities where we operate. As well as creating jobs, the Academy partnerships are helping to ensure we find great people in places where skilled employees can be hard to find. Involvement also gives our employees a chance to participate, make a difference and make sure we provide a consistent guest experience throughout the world.

In China alone we have worked with 23 partners in 10 locations, training more than 4,800 students each year. We are now working towards similar partnerships in other countries.

We have been awarded the Carbon Trust Standard in the UK for showing real carbon reduction and a commitment to ongoing reductions. We also have plans in place for the UK’s Carbon Reduction Commitment.

Our goal is to achieve energy savings of between 6% and 10% in our owned and managed estate by 2012.

Our approach sits at the heart of our business and is championed at the highest level by our Board of Directors, supported by our global Corporate Responsibility Committee, chaired by Non-Executive Director, Jennifer Laing.

Responsible business 23

Joining forces

We have joined forces with some of the world’s leading organisations in our mission to be a great company. Our collaborations include Business in the Community, the International Tourism Partnership and Harvard University to make improvements in areas ranging from carbon emissions and conservation to labour and community projects. We have also sponsored Oxford University’s Plant Diversity Research Project to help us understand better how hotel design and development impacts the environment.

Shelter in a storm

Hotels perform many functions. They are a place to celebrate, to do business and to provide opportunities for employment. When disaster strikes, they also provide shelter in a storm. We work with one of the world’s biggest aid agencies to develop a rapid, cohesive response strategy, including guidelines to help hotels make the best use of their resources in times of disaster.

Green matters

Our research shows that many US and UK travellers prefer socially responsible hotels and are willing to pay for a greener stay. With travellers expected to increase from 903 million people in 2007 to 1.6 billion in 2020 (World Travel and Tourism Council), it is confirmation that our work to create green hotels is not only good for the environment, but good for our business.

Did you know?

IHG is the only hospitality company

sponsoring Meeting Professionals

International to provide resources

and tools to make meetings as

sustainable as possible.

Great partnerships

Working together with National Geographic’s Centre for Sustainable Development, we encourage a deeper appreciation of our world and inspire a passion for its preservation. In September 2010, we launched our first InterContinental Responsible Business Day, joining up the efforts of our 170 hotels to ‘Make a World of Difference’. Activities ranged from cleaning woods and parks to preserving historical monuments so they can be enjoyed by our guests in years to come.

The InterContinental New York Times Square opened in July 2010 with Mayor Michael Bloomberg cutting a green vine to signify the hotel’s green credentials.

UN Global Compact

To support our responsible business strategy, we are one of the first hotel companies to sign up to the UN Global Compact, the world’s largest corporate citizenship and sustainability initiative. This aligns our operations, culture and strategies with 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption.


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IHG has over 4,400 hotels in 100 countries and territories. Our brands are in 15 of the 20 largest hotel markets in the world. When people travel, they look for familiar brands they know from home, increasing the demand for hotels that operate under our brands around the world. Our three operating regions are the Americas, Europe, Middle East and Africa (EMEA), and Asia Pacific.

Aroundtheworld

Where we operate

Americas Hotels Rooms

InterContinental 56 19,120

CrownePlaza 209 57,073

HolidayInn 812 144,683

HolidayInnExpress 1,847 159,867

HolidayInnClubVacations 6 2,892

HotelIndigo 35 4,254

StaybridgeSuites 183 20,014

CandlewoodSuites 288 28,253

Other 22 3,219

Total for Americas 3,458 439,375

Total development pipeline 890 102,509

find out more on page 26

Holiday Inn Chiangmai, Thailand

Around the world 25

Europe,MiddleEastandAfrica Hotels Rooms




HolidayInnExpress 198 23,706

HotelIndigo 2 110

StaybridgeSuites 5 748

Other 2 291

Total for EMEA 694 120,852



AsiaPacific Hotels Rooms




HolidayInnExpress 30 7,655

HotelIndigo 1 184

Other 18 4,159

Total for Asia Pacific 285 86,934



4,437 hotels globally1,275 hotels in the pipeline

647,161 rooms globally204,859 rooms in the pipeline


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Where we operate

Numberofroomsbybusinessmodel

No. of Rooms

1.Franchised 392,536

2.Managed 43,848

3.Owned&leased 2,991

The quality of our hotels, the strength of our brands and our great people put us in exactly the right place to benefit from a sustainable economic recovery. We enter 2011 in a position of strength, says Jim Abrahamson.

TheAmericas

Hotelsin Roomsinpipeline pipeline

Hotels Rooms open open

1

2

3

3,458

890439,375

102,509

Regionalperformance

After a difficult 2009, we were cautious about the outlook for 2010. But signs of an upturn came early in the second quarter with leisure trade improving through the year. With the return of business bookings in the third and fourth quarters, occupancy over the year grew 5.9%.

A welcome rise in revenue per available room (RevPAR) was in the crucial midscale market which accounts for almost 70% of all our rooms. Working with owners we were able to successfully relaunch Holiday Inn and encourage guests to stay more and pay more (see page 11).

Across all brands, and despite difficult economic conditions, we opened 194 new hotels and signed another 201. Holiday Inn signings were strongest with 49 new hotels, up 4.3% on 2009. The strong results are testimony to the hard work and leadership throughout our Americas team.

United States Quality hotels in quality markets, such as New York, Chicago and San Francisco, led our performance. Having signed more deals with leading investors than any hotel group, our share of the pipeline reached 20% against our current market share of 8%. Our strategy to convert hotels to IHG brands has allowed us to widen our portfolio. We re-entered the important Hawaii market with the Holiday Inn Beachcomber Resort in Waikiki Beach and formed an InterContinental Alliance with Las Vegas Sands Corp. to bring the Venetian and Palazzo resorts into our system. In all, we opened 172 hotels and signed 165 more.

Canada The sub-prime lending crisis affected Canada far less than the US. We opened 12 hotels and added 9 to the pipeline, increasing our pipeline and reach, especially in major markets like Montreal and Toronto, where our performance remained solid. We also signed our third Canadian Hotel Indigo, in Vancouver. All IHG brands are well-positioned for future growth in this important market.

Latin America and Mexico With the opening of 10 hotels, we now have 194 hotels in 21 countries and territories in Mexico and Latin America, and 68 in the pipeline. We celebrated a milestone with Holiday Inn’s 40th Anniversary in Mexico. Crowne Plaza and Staybridge Suites made their debuts in Querétaro, central Mexico. In Latin America we opened a number of new hotels including the InterContinental in Mendoza, Argentina, Holiday Inn Express Cuiaba in Brazil and Crowne Plaza in San Salvador.

InterContinental New York Times Square, US

Performancehighlights

• Revenue per available room (RevPAR) up 4.9%

• Revenue up 5% to $807m

• Operating profit*up 28% to $369m*Before exceptional items


Speaking out for travel and tourism

It was an important year for public policy in the US. We played an influential role in conjunction with the US Travel Association in helping secure the Travel Promotion Act in March 2010. This paved the way for the Corporation for Travel Promotion (CTP). CTP will invest around $400 million in public-private funds to encourage travel to the US. We also continued our work with the American Hotel & Lodging Association (AHLA) and the US Travel Association to successfully fight regulatory challenges and put forward solutions to improve the inbound visitor experience.

Buying together is better

We work with our Owners’ Association, the IAHI, to find ways to help owners improve the guest experience and run their hotels more profitably. In 2010 we launched InnSupply, a new web-based procurement plan for franchisees in the US and Canada. InnSupply equips owners with the collective buying power of our system and the ability to buy hotel goods more efficiently. As Bill DeForrest says on page 5, the savings to owners in dollars and time should be significant.

The Venetian Resort Hotel, Las Vegas

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The Americas 27

Aloha again, Hawaii

Holiday Inn returned to Hawaii after a short absence when the Waikiki Beachcomber Resort joined our system. The resort, owned and managed by Outrigger Enterprises, has been given a $30 million renovation and will be a major attraction for Priority Club Rewards members.

Did you know?

The Palazzo was ranked

first among Las Vegas hotels in

Travel & Leisure’s ‘World

Best Awards’ 2010.

“Our confidence in our strategy to build the quality of our hotels and increase market share means we enter 2011 in a position of strength. Our focus on guest preference, performance and profitability will continue.”

Jim Abrahamson President, The Americas

Waikiki Beach, Hawaii

Venetian and Palazzo

We were delighted to announce the signing of a 10-year agreement with Las Vegas Sands Corp. to affiliate the renowned Venetian and Palazzo with InterContinental Hotels & Resorts. The resorts offer our guests more than 6,800 luxurious all-suite rooms, as well as world-class entertainment and business facilities in one of the most requested destinations for our 56 million Priority Club Rewards members. Las Vegas Sands Corp. called the partnership “a perfect marriage between two world-class resorts and one of the most prominent hotel companies in the world”.


Middle East and Turkey We continued our leadership position in the Middle East. We opened two hotels this year, including the region’s largest Holiday Inn Express, a 381-room property at Dubai Airport. The region’s GDP growth is outpacing the rest of the world, offering great revenue opportunities. Our aim is to open another 38 Middle East hotels by 2020. In Turkey, a new frontier and fast growing market for us, we signed deals in Istanbul for two Holiday Inn Express hotels and a Crowne Plaza.

Where we operate


No. of Rooms

1.Franchised 79,950

2.Managed 39,456

3.Owned&leased 1,446

New hotels and signings demonstrated the appeal of our brands in existing and new markets, allowing us to continue to build scale and grow our business, says Kirk Kinsell.

Europe,MiddleEastandAfrica


Hotels Rooms open open

1

2

3

694

153

120,852

31,435

Regionalperformance

Occupancy growth led our revenue per available room (RevPAR) recovery in 2010 while rate growth, the first for two years, began to emerge in the summer. This was driven by business guests making a more regular comeback by the end of the year, particularly in major cities like London.

Higher guest spending in Holiday Inn and Holiday Inn Express hotels also boosted performance, with refreshed hotels posting RevPAR gains of 7.1%. In all we opened 33 hotels and we have 153 hotels in our development pipeline across this diverse region.

Signings

As expected, our rate of openings slowed but our pipeline grew. We signed deals to open Holiday Inn and Holiday Inn Express hotels in locations as diverse as Canary Wharf in London and Ekaterinburg in Russia. Meanwhile, we signed with partners to launch Crowne Plaza in Istanbul, St. Petersburg and Amsterdam and have Hotel Indigo set to debut in Madrid, Lisbon, Newcastle and Berlin over the next four years. We will also be opening our first Staybridge Suites in London at the Westfield Stratford City shopping centre, the gateway to the Olympic Village, where we will also open a Holiday Inn.

United Kingdom The UK remains one of our fastest growing markets with 12 openings in 2010 and 31 in the pipeline. New openings included the Holiday Inn Manchester-MediaCityUK, where thousands of BBC employees will relocate and our second Hotel Indigo in London, near Tower Bridge. Meanwhile, our biggest UK partner, LRG, refreshed all its 57 Holiday Inn brand properties by the summer. This includes the Kensington Forum in London, Europe’s largest Holiday Inn.

Germany and France RevPAR in Germany rose 18.4%, thanks to a recovery in corporate bookings. We also enjoyed strong RevPAR performance in France of 9%. Both markets were helped by government intervention to reduce VAT on hotel stays to stimulate demand and create thousands of new jobs.




• Operating profit* decreased 2% to $125m*Before exceptional items

Staybridge Suites Abu Dhabi – Yas Island, UAE


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Europe, Middle East and Africa 29

Reaching out to more owners

We are keen to help owners improve the guest experience and operate more efficiently, not least in struggling economies such as Portugal, Italy, Greece and Spain.

In a bid to support franchisees and owners in diverse and often challenging markets, we staged business performance meetings in eight locations across the region. High on the agenda were compliance with our brand standards; use of our business tools; and issues of cost management.

These initiatives, alongside strong financial returns are helping us attract new owners. Under its EMEA Chairman Joep Peeters’ leadership, IAHI membership reached 86% in the region in 2010, the highest figure globally. Joep called the achievement “a great success” at our biggest owners’ conference, which took place in Cairo.

Taking tourism more seriously

We are working with stakeholders including the British Hospitality Association to help the UK Government develop its tourism policy. Our key message is that our industry plays a major part in helping stimulate economic growth. Prime Minister, David Cameron, has now recognised that every 0.5% increase in the country’s 3.5% share of the world tourism market can add £2.7 billion to the economy and more than 50,000 jobs.

London 2012

Holiday Inn is being recognised on the world stage as official Hotel Services Provider for the London 2012 Olympic and Paralympic Games. We are playing a key role in the preparation and running of the Games. As well as opening two hotels overlooking the Olympic Park, a Staybridge Suites and a Holiday Inn, we will be providing accommodation in up to 39 UK locations for the Olympic Torch Relay. We are also offering up to 120 of our best people the once-in-a-lifetime opportunity to help the organising committee LOCOG manage the Athletes’ Village. We have also offered our help to British athletes and their coaching staff and families to stay for free when they visit our hotels around the world. And we will be supporting more than 15 aspiring athletes by providing them with the chance to gain valuable work experience in our hotels across the world. We are looking forward to helping host around 250,000 Olympics-related guests in the run-up to the Games.

“Our strategy has been to anticipate and take advantage of the upturn. We achieved this by signing the right deals in the right locations with the right owners, while also improving the guest experience. We are building a profitable future for our owners and great hotels for our guests.”

Kirk KinsellPresident, Europe, Middle East and Africa

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Did you know?

InterContinental London

Park Lane was crowned winner

of Condé Nast Traveller’s

2010 Gold List Award for

‘Best UK Hotel for Food’.

Crowne Plaza guests go electric

At the 366-room Crowne Plaza Copenhagen Towers, one of the world’s greenest hotels, we took energy production one step further by installing electricity-producing bicycles in the gym for guests to use. Anyone producing 10 watt hours of electricity or more for the hotel was given a locally-produced complimentary meal. This encouraged guests not only to get fit but also reduce their carbon footprint, saving electricity and money.

Crowne Plaza Copenhagen Towers is a member of the UN Global Compact. It has EU Green Building and Green Key certification and aims to become carbon neutral.

Crowne Plaza Copenhagen Towers, DenmarkOfficial Hotel Services Provider London 2012



Holiday Inn Express gains territory Partnering with the Chee Swee Cheng group of companies we launched Holiday Inn Express in Singapore and Malaysia. Singapore will also offer Southeast Asia’s largest Holiday Inn Express, following a deal with RB Capital Hotels for us to manage a new- build 400-room property in the central business district.

“We enjoyed a strong year and are now set to increase our presence in India and the emerging markets in Indochina. The strength of our brands and system, coupled with favourable underlying economic conditions in the region, give us growth opportunities to create more Great Hotels Guests Love.”

Jan Smits Managing Director, Asia Australasia

Where we operate

Our Asia Pacific business is comprised of two operations: Asia Australasia and Greater China. In 2010 both teams focused on growth opportunities and announced a number of exciting new hotel openings and signings.

AsiaPacific

Did you know?

In 2010 Holiday Inn was voted

‘Best Mid-Market Hotel

Brand in Asia Pacific’ for

the 10th year running at the

2010 Business Traveller

Asia Pacific Awards.

India promises room for growth

We have 12 hotels and nearly 50 years experience of working in India. A strong economy coupled with a rapidly expanding middle class means the country offers long-term growth potential. We aim to grow quickly with our current pipeline of 44 hotels. During 2010 we signed six new properties with the Amrapali Group, who will launch the Holiday Inn Express brand in the country. This debut will help us meet demand for high quality hotels in India’s limited service sector. We expect to be operating 150 hotels by 2020 with the Holiday Inn brand family leading that growth.

New opportunities in Southeast Asia

We are now set to offer five brands in Bangkok by 2013. We opened Crowne Plaza Bangkok Lumpini Park in late 2010 and the city’s first Holiday Inn Express will welcome guests by 2012, followed by Hotel Indigo in 2013. Emerging markets in Indochina, such as Vietnam, also offer solid growth opportunities. This year we signed two new Holiday Inn Resorts for prime beachfront locations in Vietnam’s top tourist destinations, Cam Ranh Bay and Phu Quoc.

Resorts poised to flourish

Home to some of the most desirable travel destinations, Asia Australasia supports a strong resort strategy. We have 10 new resorts in development across the region, putting our brands on the map in some of the region’s most idyllic and culturally rich locations. We will be adding the InterContinental Danang Resort and Holiday Inn Phuket Mai Khao Beach Resort to our current portfolio of resorts in French Polynesia, Fiji, Thailand, Bali and the Maldives.

AsiaAustralasia

Asia Australasia enjoyed improvement in travel and tourism during 2010 with revenue per available room (RevPAR) increasing by 5.6%. Corporate bookings and business travel returned and major events, such as the Commonwealth Games in Delhi, contributed to inbound tourism. We are poised to expand further in key markets in one of the world’s fastest growing regions.

Crowne Plaza New Delhi Rohini, India

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Shanghai welcomes the world

The new 400-room InterContinental Shanghai Expo opened in April in time to welcome over 73 million visitors to World Expo. Built right next to the World Expo Park in Pudong, it is the closest world class hotel to the site. World Expo, which lasted for six months, boosted RevPAR in our 23 hotels across the city with some owners reporting rises in excess of 100%.

“The opportunity for us in Greater China is phenomenal. We are long-established as the leading international hotel operator in the region and have built a broad portfolio of strong brands in key locations. We have set out plans to double in size over the next five years.”

Keith Barr Managing Director, Greater China

Asia Pacific 31W

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GreaterChina

We were the first international hotel operator to enter China. We arrived in 1984 and today enjoy a leadership position. We already have a business in mainland China generating over US$1 billion in total gross revenue and we represent 14% of the branded hotel sector and 28% of the development pipeline. China’s economy is expected to expand significantly over the coming years with the hotel sector becoming the world’s largest by 2025. This gives us the opportunity to double our size over the next five years.

It was an exceptional year for us, thanks to the strength of the economy and our growth strategy to develop the right brands in the right places with the right owners. We saw significant RevPAR growth in 2010, averaging 25.8% for the year. We continued to grow our presence in Beijing and Shanghai and now also have more than one brand operating in many large secondary cities such as Chongqing, Chengdu, Guangzhou, Tianjin and Suzhou.

Over the year we opened 24 hotels in 17 different cities, including six InterContinental and seven Crowne Plaza properties. We also agreed Asia Pacific’s first Hotel Indigo, Shanghai on the Bund. We now have hotels in 44 cities across mainland China.

We also signed a multi-brand, multi-property deal with HNA Hotels & Resorts Group, one of China’s fast emerging hotel companies. This adds 1,300 rooms to our development pipeline. And having signed four deals at the Hotel Investment Conference Asia Pacific we are set to open Hotel Indigo and Holiday Inn Express hotels in the coastal cities of Taipei, Xiamen and Hong Kong.

We will have more than 300 hotels operating in China in five years time, reinforcing our leadership in the region.

Great Wall hosts ‘Stay You’ gallery

The first photo exhibition ever staged at the Great Wall of China marked the start of Holiday Inn’s global ‘Stay You’ campaign. We invited enthusiasts worldwide to submit photos of people ‘being themselves’. Nearly 10,000 entries competed for pride of place. The panel of judges chose 100 winning photos to hang alongside the work of 50 famous photographers from China and abroad. Another 300 photos went on display in 15 Chinese cities, including a special collection shot by Holiday Inn staff.


No. of Rooms

1.Franchised 6,834

2.Managed 79,407

3.Owned&leased 693

AsiaPacific




• Operating profit*up 71% to $89m*Before exceptional items


Hotels Roomsopen open

285

232

86,934

70,915

‘Stay You’, Great Wall of China



Factsandfigures

RichardSolomons Chief Financial Officer and Head of Commercial Development

This Summary Financial Statement provides a commentary on the performance of the Group for the financial year ended 31 December 2010.

Summary financial statement

Group results

Revenue increased by 5.9% to $1,628m and operating profit before exceptional items increased by 22.3% to $444m during the 12 months ended 31 December 2010.

The 2010 results reflect a return to RevPAR growth in a recovering market, with an overall RevPAR increase of 6.2% led by occupancy. Fourth quarter comparable RevPAR increased 8.0% against 2009, including a 2.4% increase in average daily rate. Over the full year average daily rate grew for the InterContinental and Holiday Inn brands by 1.3% and 0.5% respectively.

In 2010 the InterContinental Buckhead, Atlanta and the Holiday Inn Lexington were sold, with proceeds used to reduce net debt. These disposals result in a reduction in owned and leased revenue and operating profit of $19m and $4m respectively compared to 2009.

The ongoing focus on efficiency across the Group largely sustained underlying cost reductions achieved in 2009. Regional and central overheads increased by $49m, from $209m in 2009 to $258m in 2010, driven by incremental performance-based incentive costs of $47m and charges of $4m relating to a self-insured healthcare benefit plan.

During 2010, the IHG global system remained in line with 2009 at 4,437 hotels (647,161 rooms). Openings of 259 hotels (35,744 rooms) were driven, in particular, by continued expansion in the US and China and offset the removal of 260 hotels (35,262 rooms).

In Asia Pacific, demand for upscale brands (InterContinental, Crowne Plaza and Hotel Indigo) contributed 65% of total room openings in the region.

The $1bn roll-out of the Holiday Inn relaunch is substantially complete, enabling the consistent delivery of best-in-class service and physical quality in all Holiday Inn and Holiday Inn Express hotels. By 31 December 2010, 2,956 hotels were converted globally under the relaunch programme, representing 89% of the total estate.

At the end of 2010, the pipeline totalled 1,275 hotels (204,859 rooms). Signings of 319 hotels (55,598 rooms) represent an increase in rooms signed from 2009 levels. Demonstrating the continued demand for IHG brands globally, 50% of the rooms pipeline is now outside the Americas region. There were 25 hotel signings (3,025 rooms) for Hotel Indigo as it gains real momentum in Europe and Asia Pacific where, together, 12 hotels (1,456 rooms) were signed. IHG also entered into an InterContinental Alliance relationship with the Las Vegas Sands Corp. to bring the 6,874 all-suite Venetian and Palazzo Resorts into the system in 2011.

Americas results

Revenue and operating profit before exceptional items increased by $35m to $807m (4.5%) and $81m to $369m (28.1%) respectively.

Franchised revenue increased by $28m to $465m (6.4%) and operating profit by $28m to $392m (7.7%). Royalties growth was driven by RevPAR gains across all brands and by 4.5% in total. Non-royalty revenues and profits remained flat on 2009, as real estate financing for new activity remained constrained.

Managed revenue increased by $9m to $119m (8.2%) in line with the RevPAR growth of 7.5%. Operating profit increased by $61m to $21m from a $40m loss in 2009. The prior year loss included a charge for priority guarantee shortfalls relating to a portfolio of hotels. A provision for onerous contracts was established on 31 December 2009 and further payments made during 2010 were charged against this provision. Excluding the effect of the provision, managed operating profit increased by $3m, driven by RevPAR growth of 23.3% in Latin America.

The Global Finance team comprises a number of disciplines that support the delivery of Great Hotels Guests Love. The team not only ensures that the Group has a robust governance and control framework around its financial systems and financial statements but it also supports all areas of the business giving proactive and relevant financial and strategic input.

Global Finance is continually looking for ways to improve, with key initiatives being delivered through our Global Finance Transformation framework that includes a team dedicated to prioritising, reporting and project managing a number of multi-year projects. Key achievements in 2010 included:

• delivery of procurement efficiencies across the business;

• an innovative finance education programme with over 2,300 employees taking over 15,000 online training sessions;

• further consolidation and migration of finance processes to our business service centre in India;

• implementation of new systems for financial and tax reporting; and

• reviews of business processes to highlight potential improvement areas.

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Summary financial statement 33

Owned and leased revenue declined by $2m to $223m (0.9%) and operating profit increased by $2m to $13m (18.2%). Improving trading conditions led to RevPAR growth of 6.4%, including 8.1% at the InterContinental New York Barclay.

EMEA results

Revenue increased by $17m to $414m (4.3%) and operating profit before exceptional items decreased by $2m to $125m (1.6%).

Franchised revenue and operating profit decreased by $2m to $81m (2.4%) and $1m to $59m (1.7%) respectively. Excluding the impact of $3m in liquidated damages received in 2009, revenue and operating profit increased by 1.3% and 3.5% respectively. The underlying increase was driven by RevPAR growth of 7.6% across the franchised estate.

EMEA managed revenue increased by $11m to $130m (9.2%) and operating profit decreased by $3m to $62m (4.6%). Positive RevPAR growth in key European cities and markets, including growth of 14.8% in IHG’s managed properties in Germany, was offset by unfavourable trading across much of the Middle East where RevPAR declined overall by 0.7%. At the year end, a provision of $3m was made for future estimated cash outflows relating to guarantee obligations for one hotel.

In the owned and leased estate, revenue increased by $8m to $203m (4.1%) and operating profit increased by $7m to $40m (21.2%). RevPAR growth of 11.9% benefited from average daily rate growth of 6.5% across the year. The InterContinental London Park Lane and InterContinental Paris Le Grand delivered strong year-on-year RevPAR growth of 15.0% and 11.5% respectively.

Asia Pacific results

Asia Pacific revenue and operating profit before exceptional items increased by $58m to $303m (23.7%) and by $37m to $89m (71.2%) respectively.

Continued strong economic growth in the region was given a further boost by the World Expo held in Shanghai from May to October 2010. Resulting RevPAR growth in key Chinese cities was exceptional, with Shanghai and Beijing growing 55.9% and 29.9% respectively.

Franchised revenue increased by $1m to $12m (9.1%) and operating profit grew by $2m to $7m (40.0%).

Managed revenue increased by $50m to $155m (47.6%) and operating profit increased by $29m to $73m (65.9%). In addition to strong comparable RevPAR performance, there was a positive contribution from recently opened hotels, with a 9% room increase in the size of the Asia Pacific managed estate during the year following a 10.0% increase in 2009, and a $4m operating profit benefit due to the collection of old or previously provided for debts.

In the owned and leased estate, revenue increased by $7m to $136m (5.4%) and operating profit by $5m to $35m (16.7%). These results were driven by the InterContinental Hong Kong, where RevPAR increased 15.3% during the year.

Central results

During 2010, net central costs increased by $35m from $104m to $139m (33.7%). The movement was primarily driven by an increase in performance-based incentive costs where no payments were made on some plans in 2009.

Other financial items

Exceptional operating items of $15m consisted of gains of $35m from the disposal of assets, including $27m profit on the sale of the InterContinental Buckhead, Atlanta offset by an impairment charge of $7m, severance costs of $4m and costs of $9m to complete the Holiday Inn brand family relaunch.

Compared with the previous year, exceptional operating items were significantly lower as 2009 was impacted by difficult trading which resulted in exceptional costs of $373m, largely down to the recognition of impairment charges, an onerous contract provision and the cost of office closures.

Net financial expenses increased from $54m in 2009 to $62m in 2010, as the effect of the £250m 6% bond offset lower net debt levels and low interest rates. Average net debt levels in 2010 were lower than 2009 primarily as a result of improved trading, the disposal of the InterContinental Buckhead, Atlanta and a continuing focus on cash.

The effective rate of tax was 26% (2009 5%).

Basic earnings per ordinary share in 2010 was 101.7¢, compared with 74.7¢ in 2009. Adjusted earnings per ordinary share was 98.6¢, against 102.8¢ in 2009.

The Board has proposed a final dividend per ordinary share of 35.2¢ (22.0p). With the interim dividend per ordinary share of 12.8¢ (8.0p), the full-year dividend per ordinary share for 2010 will total 48.0¢ (30.0p).

Capital structure and liquidity management

In 2010, the Group continued its focus on cash management. During the year, $462m of cash was generated from operating activities and overall, net debt decreased by $349m to $743m.

In December 2009, the Group issued a seven-year £250m public bond, at a coupon of 6%, which was initially priced at 99.465% of face value.

ThisSummaryFinancialStatementwasapprovedbytheBoardon14February2011andsignedonitsbehalfbyRichardSolomons.ItdoesnotcontainsufficientinformationtoprovideascompleteanunderstandingoftheGroup’sresultsandstateofaffairsasthatprovidedintheAnnualReportandFinancialStatements2010.Thatreportmaybeobtained,freeofcharge,bywritingtoIHGortheCompany’sRegistrar,Equiniti(contactdetailsareprovidedonpage45).

TheauditorshaveissuedanunqualifiedreportonthefinancialstatementscontainingnostatementunderSection498(2)or498(3)oftheCompaniesAct2006.

InformationconcerningDirectors’emolumentsisshownonpages40to43.


Group income statement 2010 2009

Before Before exceptional Exceptional exceptional Exceptional items items Total items items TotalFortheyearended31December2010 $m $m $m $m $m $m

Revenue Americas 807 – 807 772 – 772EMEA 414 – 414 397 – 397Asia Pacific 303 – 303 245 – 245Central 104 – 104 124 – 124Total revenue 1,628 – 1,628 1,538 – 1,538

Operatingprofit/(loss) Americas 369 14 383 288 (301) (13)EMEA 125 3 128 127 (22) 105Asia Pacific 89 (2) 87 52 (7) 45Central (139) – (139) (104) (43) (147)Operatingprofit/(loss) 444 15 459 363 (373) (10)Net finance costs (62) – (62) (54) – (54)Profit/(loss)beforetax 382 15 397 309 (373) (64)Tax (98) (8) (106) (15) 287 272Profitfortheyearfromcontinuingoperations 284 7 291 294 (86) 208Profit for the year from discontinued operations – 2 2 – 6 6Profitfortheyear 284 9 293 294 (80) 214

Earningsperordinaryshare(cents) Basic – continuing operations 101.0 72.6 Adjusted – continuing operations 98.6 102.8 Basic – total operations 101.7 74.7Adjusted – total operations 98.6 102.8 Dividendpershare(cents) Final – paid in respect of prior year 29.2 29.2Interim paid 12.8 12.2Final – proposed 35.2 29.2

Summary financial statement continued

Independentauditor’sstatementtothemembersofInterContinentalHotelsGroupPLCWe have examined the Summary Financial Statement for the year ended 31 December 2010 which comprises the Group income statement, Group statement of cash flows and Group statement of financial position.This statement is made solely to the Company’s members, as a body, in accordance with Section 428(4) of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s statement and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this statement, or for the opinions we have formed.

Respective responsibilities of Directors and the auditorThe Directors are responsible for preparing the Annual Review and Summary Financial Statement in accordance with applicable United Kingdom law.Our responsibility is to report to you our opinion on the consistency of the Summary Financial Statement within the Annual Review and Summary Financial Statement with the full annual financial statements, the Directors’ Remuneration Report and the Directors’ Report, and its compliance with the relevant requirements of Section 428 of the Companies Act 2006 and the regulations made thereunder.We also read the other information contained in the Annual Review and Summary Financial Statement and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Summary Financial Statement. The other information comprises only the

Headlines, Chairman’s Statement, Chief Executive’s Review, Business Reviews, Summary Directors’ Report, Corporate Governance Statement, Summary Audit Committee Report and Summary Remuneration Report.We conducted our work in accordance with Bulletin 2008/3 issued by the Auditing Practices Board. Our report on the Company’s full annual financial statements describes the basis of our opinion on those financial statements, the Directors’ Remuneration Report and the Directors’ Report.

OpinionIn our opinion the Summary Financial Statement is consistent with the full annual financial statements, the Directors’ Report and the Directors’ Remuneration Report of InterContinental Hotels Group PLC for the year ended 31 December 2010 and complies with the applicable requirements of Section 428 of the Companies Act 2006, and the regulations made thereunder.Ernst & Young LLP Statutory Auditor London 14 February 2011.

Directors’statementThe auditor has issued unqualified reports on the full annual financial statements, the auditable part of the Directors’ Remuneration Report and on the consistency of the Directors’ Report with those annual financial statements. Their report on the full annual financial statements and the auditable part of the Directors’ Remuneration Report contained no statement under Sections 498(2) or 498(3) of the Companies Act 2006.

Factsandfigures

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Group statement of cash flows 2010 2009Fortheyearended31December2010 $m $m

Cashflowfromoperations 583 484Net interest paid (57) (51)Tax paid on operating activities (64) (1)Netcashfromoperatingactivities 462 432Capital expenditure (95) (148)Proceeds from disposal of operations, associates and other financial assets 135 35Tax paid on disposals (4) (1)Dividends paid to shareholders (121) (118)Decrease in borrowings (292) (249)Other financing movements (34) 5Netmovementincashandcashequivalentsintheyear 51 (44)Cash and cash equivalents at beginning of the year 40 82Exchange rate effects (13) 2Cashandcashequivalentsatendoftheyear 78 40

Group statement of financial position 2010 200931December2010 $m $m

ASSETS Property, plant and equipment 1,690 1,836Goodwill 92 82Intangible assets 266 274Investment in associates 43 45Retirement benefit assets 5 12Other financial assets 135 130Deferred tax assets 79 95Totalnon-currentassets 2,310 2,474Inventories 4 4Trade and other receivables 371 335Current tax receivable 13 35Cash and cash equivalents 78 40Other financial assets – 5Totalcurrentassets 466 419Totalassets 2,776 2,893

LIABILITIES Loans and other borrowings (18) (106)Derivative financial instruments (6) (7)Trade and other payables (722) (668)Provisions (8) (65)Current tax payable (167) (194)Totalcurrentliabilities (921) (1,040)Loans and other borrowings (776) (1,016)Derivative financial instruments (38) (13)Retirement benefit obligations (200) (142)Trade and other payables (464) (408)Provisions (2) –Deferred tax payable (84) (118)Totalnon-currentliabilities (1,564) (1,697)Totalliabilities (2,485) (2,737)Netassets 291 156

IHGshareholders’equity 284 149Non-controlling interest 7 7Totalequity 291 156

Summary financial statement 35

Factsandfigures

Non-ExecutivesDavidWebsterNon-ExecutiveChairman*ChairmanoftheNominationCommitteeAppointed a Director in April 2003. Appointed Non-Executive Chairman in January 2004. Also Non-Executive Chairman of Makinson Cowell Limited, a Non-Executive Director of Amadeus IT Holding SA and a Director of Temple Bar Investment Trust PLC. Formerly Chairman of Safeway plc. Age 66.

DavidKapplerSeniorIndependentNon-ExecutiveDirector#ChairmanoftheAuditCommitteeAppointed a Director and Senior Independent Director in June 2004. He is also a Non-Executive Director of Shire plc. Formerly Chief Financial Officer of Cadbury Schweppes plc and Non-Executive Chairman of Premier Foods plc. A member of the Trilantic Europe Advisory Council. Age 63.

GrahamAllanNon-ExecutiveDirector•Appointed a Director in January 2010. Chief Executive Officer of Yum! Restaurants International (YRI), a subsidiary of Yum! Brands, Inc. Previously President of YRI from 2003 to 2010. Age 55.

RalphKuglerNon-ExecutiveDirector°ChairmanoftheRemunerationCommitteeAppointed a Director in April 2003. Chairman of Byotrol plc, a Non-Executive Director of Discovery Group Holdings Ltd, a Director of Spotless Holding Sas, Board Adviser at Mars, Incorporated, and Senior Adviser to 3i plc. Formerly an Executive Director of Unilever PLC and Unilever N.V. Age 54.

JenniferLaingNon-ExecutiveDirector•ChairmanoftheCorporateResponsibilityCommitteeAppointed a Director in August 2005. Has over 30 years’ experience in advertising and was, until 2007, Associate Dean, External Relations at London Business School. Also serves as a Non-Executive Director of Hudson Highland Group, Inc. Age 63.

JonathanLinenNon-ExecutiveDirector†

Appointed a Director in December 2005. Was formerly Vice Chairman of the American Express Company. Serves as a Non-Executive Director of Yum! Brands, Inc. and of Modern Bank, N.A., and on a number of US Councils and advisory boards. Age 67.

YingYehNon-ExecutiveDirector†

Appointed a Director in December 2007. Vice President and Chairman, Greater China Region, Nalco Company. Previously Chairman and President, North Asia Region, President, Business Development, Asia Pacific Region and Vice President, Eastman Kodak Company. Also a Non-Executive Director of AB Volvo. Age 62.

* A Non-Executive Director and a member of the Nomination Committee

# An independent Non-Executive Director and a member of the Audit, Remuneration and Nomination Committees

• An independent Non-Executive Director and a member of the Audit, Nomination and Corporate Responsibility Committees

° An independent Non-Executive Director and a member of the Audit, Remuneration, Nomination and Corporate Responsibility Committees

† An independent Non-Executive Director and a member of the Remuneration and Nomination Committees

‡ A member of the Executive Committee § Not a main Board Director

Our senior leadership team

From left to right: Graham Allan, David Webster, Jonathan Linen, Ying Yeh, David Kappler, Ralph Kugler, Jennifer Laing, James Abrahamson,


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ExecutivesAndrewCosslettChiefExecutive‡

Appointed Chief Executive in February 2005. Previously at Cadbury Schweppes plc, where he was most recently President, Europe, Middle East & Africa. Serves on the Executive Committee of the World Travel & Tourism Council and the President’s Committee of the CBI. Age 55.

JamesAbrahamsonPresident,TheAmericas‡

Appointed a Director in August 2010. Joined the Group as an Executive Committee member with responsibility for the Americas Region in January 2009 from Global Hyatt Corporation. Responsible for the business development and performance of all the hotel brands and properties in the Americas region. Age 55.

TomConophyExecutiveVicePresidentandChiefInformationOfficer‡§

Joined the Group in February 2006 from Starwood Hotels & Resorts International. Responsible for global technology, including IT systems and information management throughout the Group. Age 50.

KirkKinsellPresident,EMEA‡

Appointed a Director in August 2010. Joined the Group in 2002. Appointed President, EMEA and an Executive Committee member in 2007. Responsible for the business development and performance of all the hotel brands and properties in the EMEA region. Age 56.

TracyRobbinsExecutiveVicePresident,HumanResources&GroupOperationsSupport‡§

Joined the Group in December 2005 from Compass Group PLC. Responsible for global talent management, leadership development, reward strategy, organisational capability and operations support. Age 47.

TomSeddonExecutiveVicePresidentandChiefMarketingOfficer‡§

Having served in senior positions with IHG’s predecessor companies until 2004, rejoined the Group in 2007 from SUBWAY®. Responsible for worldwide brand management, global sales, marketing and loyalty programmes. Age 42.

RichardSolomonsChiefFinancialOfficerandHeadofCommercialDevelopment‡

Joined the Group in 1992. Responsible for corporate and regional finance, Group financial control, strategy, investor relations, tax, treasury, commercial development and procurement. Age 49.

GeorgeTurnerExecutiveVicePresident,GeneralCounselandCompanySecretary‡§

Joined the Group in September 2008 from Imperial Chemical Industries PLC. Appointed Executive Vice President, General Counsel and Company Secretary in January 2009. Responsible for corporate governance, risk management, insurance, data privacy, internal audit, company secretariat, legal and corporate responsibility & public affairs. Age 40.

In addition, IHG has a strong management team who report into the IHG Senior Leadership Team. Jan Smits is Managing Director, Asia Australasia, and Keith Barr is Managing Director, Greater China, both reporting directly to Andrew Cosslett who has overall responsibility for the Asia Pacific region.

Tom Seddon, Tom Conophy, Kirk Kinsell, Andrew Cosslett, Tracy Robbins, Richard Solomons and George Turner.

Our senior leadership team 37

Factsandfigures

Activities of the GroupThe principal activities of the Group are in hotels and resorts, with franchising, management, ownership and leasehold interests in over 4,400 establishments, with more than 640,000 guest rooms in 100 countries and territories around the world.

A review of the performance of the Group is contained in the Chairman’s statement and the Chief Executive’s review on pages 3 to 5, the reviews presented on pages 6 to 31 and in the Summary Financial Statement on pages 32 to 35.

Results and dividendsThe operating profit before exceptional items was $444m. An interim dividend of 8.0p per share was paid on 1 October 2010. The Directors are recommending a final dividend of 22.0p per share to be paid on 3 June 2011 to shareholders on the Register at close of business on 25 March 2011.

Share capitalAt 31 December 2010, the Company’s issued share capital consisted of 289,472,651 ordinary shares of 1329⁄47p each. There are no special control rights or restrictions on transfer attaching to these ordinary shares.

During the year, no awards or grants over shares were made that would be dilutive of the Company’s ordinary share capital.

Share repurchasesNo shares were purchased or cancelled under the authority granted by shareholders at the Annual General Meeting held on 28 May 2010. The share buyback authority remains in force until the Annual General Meeting in 2011, and a resolution to renew the authority will be put to shareholders at that Meeting.

Substantial shareholdings As at 14 February 2011, the Company had been notified of the following significant holdings of voting rights in its ordinary shares:

Cedar Rock Capital Limited 5.07% Direct interestBlackRock, Inc. 5.02% Indirect interestCapital Research and Management Company 5.02% Indirect interestLegal & General Group plc 3.96% Direct interest

DirectorsDetails of current Board members are shown on pages 36 and 37. Executive Directors have service contracts and Non-Executive Directors have letters of appointment.

The Board may exercise all the powers of the Company. The Group maintains insurance cover for and has provided indemnities to its Directors and officers, as permitted by the Companies Act 2006.

Details of the beneficial share interests of Directors who were on the Board at the year end are shown below.

31 December 2010 InterContinental Hotels Group PLC ordinary shares

ExecutiveDirectorsJames Abrahamson 52,203Andrew Cosslett 496,133Kirk Kinsell 63,136 1

Richard Solomons 171,522Non-ExecutiveDirectorsGraham Allan 2,000David Kappler 1,400Ralph Kugler 1,169Jennifer Laing 3,998Jonathan Linen 7,3432

David Webster 34,905Ying Yeh –

1 62,499 ordinary shares and 637 American Depositary Receipts.

2 Held in the form of American Depositary Receipts.

EmployeesIHG directly employed an average of 7,858 people worldwide during 2010, whose costs are borne by the Group. When the whole IHG estate is taken into account, approximately 335,000 people are employed globally across IHG’s brands. The Group is committed to providing staff with equality of opportunity, without discrimination. Great emphasis is placed on employee communications, particularly on matters relating to the Group’s business and its performance.

DonationsDuring the year, the Group donated $1,650,000 in support of community initiatives and charitable causes. This figure includes contributions from IHG employees and guests. No payments were made for political purposes.

AuditorsThe Directors confirm that they have taken steps to make themselves aware of relevant audit information. None of the Directors is aware of any relevant audit information which has not been disclosed to the auditors.

The reappointment of Ernst & Young LLP as auditors of the Company will be put to members at the Annual General Meeting.

Annual General MeetingThe Notice of the Annual General Meeting to be held at 11.00am on Friday, 27 May 2011 is contained in a circular sent to shareholders at the same time as this Review.

Going concernAt the end of 2010, the Group was trading comfortably within its banking covenants and debt facilities. IHG’s fee-based model and wide geographic spread means that it is well placed to manage through uncertain times.

The financial statements for the year ended 31 December 2010 have therefore been prepared on the going concern basis.

Summary Directors’ report


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Combined Code complianceThe Board is committed to compliance with the principles set out in the Combined Code on Corporate Governance (Combined Code) and considers that the Company has complied with its requirements throughout the year ended 31 December 2010.

A revised UK Corporate Governance Code (the new UK Code) has been introduced for financial years beginning on or after 29 June 2010. IHG will report on its compliance with the new UK Code as part of its 2011 Corporate Governance statement.

Control environmentThe Board is responsible for the Group’s system of internal control and risk management and for reviewing its effectiveness. In order to discharge that responsibility, the Board has established the procedures necessary to apply the Combined Code, including clear operating procedures, lines of responsibility and delegated authorities.

For the year ended 31 December 2010, the Board has conducted a review of the effectiveness of the system of risk management and internal control. The system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and it can only provide reasonable and not absolute assurance against material misstatement or loss. Whilst areas for improvement have been identified and actions initiated, no significant shortcomings have been identified from the annual assessment.

Board and CommitteesThe Board is responsible to the shareholders for the strategic direction, development, performance and control of the Group. It also ensures that the necessary financial and human resources are in place for the Group to meet its objectives. There are eight regular Board meetings a year and further meetings are held as needed.

David Webster was Non-Executive Chairman throughout the year. In addition, a team of six experienced independent Non-Executive Directors represent a strong source of advice and judgement. Induction programmes are prepared for new Directors and ongoing training needs for all Directors are kept under review.

In addition to the Executive Committee, the following are the main Committees of the Board: Audit Committee; Remuneration Committee; Nomination Committee; and Corporate Responsibility Committee. The Audit, Remuneration, Nomination and Corporate Responsibility Committees consist wholly of Non-Executive Directors. The Chairman of the Company is a member of the Nomination Committee only. The terms of reference of these Committees were reviewed during 2010 to ensure that they continue to reflect best practice, and are available on the Company’s website at www.ihgplc.com/investors under corporate governance/committees, or from the Company Secretary’s office on request.

Performance evaluations of the Board, of each main Committee and of individual Directors were undertaken for 2010. These involved completion of comprehensive questionnaires and the Chairman having discussions with each Director individually.

It was concluded that the Board as a whole operates in an effective manner, and that each Director continues to make an effective contribution and retains a strong commitment to the role. The work of each main Committee was also considered to be effective.

Although IHG is not yet subject to the recommendation of the new UK Code that all Directors submit themselves for re-election by shareholders annually, the Company is adopting this practice with effect from its next Annual General Meeting in May 2011.

Senior Independent DirectorDavid Kappler was Senior Independent Director throughout the year. His role includes being available to liaise with shareholders who have issues to raise.

Company SecretaryAll Directors have access to the advice and services of the Company Secretary. His responsibilities include advising the Board on corporate governance, and for ensuring good information flows to the Board and its Committees and between senior management and the Non-Executive Directors. He also facilitates the induction of new Directors.

Shareholder relationsThe Group reports formally to shareholders twice a year and releases quarterly results. In addition, regular meetings are held with major institutional shareholders to discuss progress of the business, its performance, plans and objectives. The Chairman, the Senior Independent Director and other Non-Executive Directors are available to meet with major shareholders to discuss governance and strategy, and to understand any issues and concerns.

The Annual General Meeting provides an additional useful opportunity to meet private shareholders and answer their questions. Information of interest to investors is also maintained on the Company’s website at www.ihgplc.com/investors

Summary Audit Committee reportThe Audit Committee, which is chaired by a financial expert, supports the Board in meeting its responsibilities in relation to the integrity of the Group’s financial statements and associated announcements, the adequacy of internal control and risk management systems and the appointment and work of the internal and external auditors. The external auditor and the Head of Global Internal Audit both have the opportunity to meet privately with the Committee.

During the year, the Committee’s deliberations included a wide range of matters addressing all its main areas of responsibility. The Committee’s main focus was to review the quarterly, interim and full-year financial results and to review the effectiveness of internal control, financial reporting and risk management processes, through reports and presentations received from internal audit, the external auditors and management. Consideration was also given to tax risk, policies and initiatives, global technology strategy, treasury matters and the funding position of the Group’s main pension plan.

Corporate governance

Summary Directors’ report and Corporate governance 39

Factsandfigures

IntroductionThe Summary Remuneration Report is extracted from information from the full Remuneration Report contained in the Annual Report and Financial Statements 2010, a copy of which is available on request and can be viewed on the Company’s website at www.ihgplc.com/investors under financial library. The Remuneration Report will be put to the vote at the forthcoming Annual General Meeting.

Market conditionsThe year started with significant uncertainty and volatility in the economic environment. However, market conditions improved progressively throughout the year as consumer confidence strengthened. Global revenue per available room (RevPAR) grew by 6.2% and room rates now show positive growth in all regions. Reflecting IHG’s results, bonus outcomes in 2010 were 175% of base salary.

Robust links between performance and reward were maintained in 2010 incentive plan designs and a number of safeguards were put in place, reflecting continuing uncertainty in the industry. Maximum bonus opportunity was temporarily capped at 175% of base salary and the target for maximum bonus achievement was temporarily increased to 120% for earnings before interest and tax (EBIT). Under the 2010/2012 Long Term Incentive Plan (LTIP) cycle, the total shareholder return (TSR) and earnings per share (EPS) measures were restored to equal weighting. Salaries were increased by an average of 2.8%, following no increase in 2009.

Following review, the Remuneration Committee has concluded that for the 2011/2013 LTIP cycle the EPS measure should be replaced with two equally weighted new measures – net Rooms growth and like-for-like RevPAR growth compared with major competitors. These measures underpin IHG’s strategy and have high relevance for most employees. The existing TSR measure remains. The maximum bonus opportunity for 2011 will be increased to 200% of base salary and the EBIT target under the Annual Bonus Plan (ABP) will revert to 110% of budget.

The Committee believes that these targets are well aligned with our goal of increasing shareholder value.

Remuneration policyFor Executive Directors and for senior executives, the following policy has been applied and will apply in future years.

Overall remuneration is intended to attract and retain high-quality executives, reward achievements aligned with business targets and key strategic objectives, align executive and shareholder interests, support equitable treatment of teams, and facilitate global assignments.

IHG’s remuneration structure places emphasis on performance- related reward. Individual elements are designed to provide the appropriate balance between fixed remuneration and variable ‘risk’ reward, linked to both the performance of the Group and personal achievements. Approximately two-thirds of variable reward is in the form of shares.

The normal policy for Executive Directors and Executive Committee members is that, using ‘target’ or ‘expected value’ calculations, their performance-related incentives will equate to approximately 70% of total annual remuneration (excluding pensions and benefits).

Remuneration elementsBasesalaryandbenefits

Salary is reviewed annually, based on individual performance, competitive market data, comparator company analysis, internal relativities and salary levels in the wider employment market. Benefits are provided in accordance with local market practice. Only base salary is pensionable. The Executive Directors’ salaries are:

2011 2010Directors £ £

Andrew Cosslett 850,780 826,000James Abrahamson 477,117 469,348Kirk Kinsell 477,117 462,875Richard Solomons 540,000 523,000

AnnualBonusPlan

Awards under the ABP require the achievement of challenging personal and corporate performance goals before target bonus of 115% of salary is payable. Half of any bonus earned is compulsorily deferred in the form of shares for three years. No matching shares are awarded by the Company.

Performancemeasures

Structure

AnnualBonus

for 2011

70%EBIT

50%Cash30%

Individual

50%DeferredShares

LongTermIncentivePlan

The LTIP allows Executive Directors and eligible management to receive share awards, subject to the achievement of performance conditions, measured over a three-year period. Awards are made annually and, other than in exceptional circumstances, will not exceed three times annual salary for Executive Directors.

The LTIP three-year cycle ending 31 December 2010 resulted in 73.8% vesting for the Executive Directors.

The performance conditions for the 2011/2013 LTIP cycle are:

• IHG’s TSR relative to the Dow Jones World Hotels index (half of the potential maximum award);

• cumulative annual net growth in rooms over the period (one quarter of the potential maximum award); and

• cumulative annual like-for-like RevPAR growth over the period (one quarter of the potential maximum award).

Performancemeasures

Structure

LTIP2011/2013

25% RevPAR

25% Rooms

100%Shares

50%TSR

For all award cycles, vesting between threshold and maximum is on a straight-line basis. The Remuneration Committee has the discretion to reduce vesting outcomes based on the quality of the financial performance of the Company over the period.

Summary remuneration report


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Summary remuneration report 41

The following table summarises the individual elements of remuneration provided to Executive Directors and Executive Committee members:

Element PurposeandlinkwithstrategyBase Salary (cash) Recognises market value of role, individual skill, performance and experience

Annual Bonus (half cash: half deferred shares – up to 200% of salary)

Drives and rewards performance of individuals and teams and aligns personal and corporate financial and non-financial objectives; aligns short and long-term rewards with returns to shareholders

Long Term Incentive Plan (shares up to 205% of salary)

Drives and rewards delivery of sustained long-term performance aligned with the interests of shareholders

Pension and benefits (varied) Provides competitive benefits, protection and savings opportunities

Performance graphThroughout 2010, the Company was a member of the FTSE 100 index and, for remuneration purposes, used a TSR comparator group of the Dow Jones World Hotels index. Accordingly, the Remuneration Committee has determined that these are the most appropriate market indices against which to test the Company’s performance. The graph below shows the TSR performance of IHG from 31 December 2005 to 31 December 2010, assuming dividends are reinvested, compared with the TSR performance achieved by the FTSE 100 index and the Dow Jones World Hotels index. Over the five-year period, IHG outperformed the FTSE 100 index by 39.6% and the Dow Jones World Hotels index by 18.5%.

TotalShareholderReturn:InterContinentalHotelsGroupPLCvFTSE100andvDowJonesWorldHotelsindex

Share ownershipExecutive Directors are expected to hold twice their base salary in shares or three times in the case of the Chief Executive. Executives are expected to hold all shares earned (net of any share sales required to meet personal tax liabilities) until their shareholding requirement is achieved. The Executive Directors complied with this requirement during 2010.

Non-Executive DirectorsNon-Executive Directors are paid a fee which is approved by the Board, having taken account of the fees paid in other companies of a similar complexity. Higher fees are payable to the Senior Independent Director who chairs the Audit Committee and to the Chairmen of the Remuneration and Corporate Responsibility Committees, reflecting the additional responsibilities of these roles.

Non-Executive Directors’ fee levels are reviewed annually. Fees have been increased with effect from 1 January 2011 as shown below. These increases are broadly in line with anticipated executive management salary increases for 2011.

Feesat Fees at 1Jan2011 1 Jan 2010Role £pa £ pa

Chairman 406,000 398,000Senior Independent Director & Chairman of Audit Committee 103,000 99,750Chairman of Remuneration Committee 86,500 84,000Chairman of Corporate Responsibility Committee 76,000 73,500Other Non-Executive Directors 65,000 63,000

Source: DatastreamInterContinental Hotels Group PLC – Total Shareholder Return Index

FTSE 100 – Total Shareholder Return Index

Dow Jones World Hotels – Total Shareholder Return Index

31 Dec 201031 Dec 200931 Dec 200831 Dec 200731 Dec 200631 Dec 2005

250

200

150

100

50

0

Factsandfigures

Service contractsThe Remuneration Committee’s policy is for Executive Directors to have rolling contracts with a notice period of 12 months. All the current Executive Directors have such contracts in place. Non-Executive Directors have letters of appointment. David Webster’s appointment as Non-Executive Chairman is subject to six months’ notice.

Directors’ emolumentsThe emoluments shown below represent salary, fees and cash bonuses (excluding pensions and bonus awards paid in shares) and tax assessable benefits and allowances, including company cars and healthcare cover. No cash performance bonuses were payable to the Executive Directors in respect of the year to 31 December 2009.

1Jan2010to 1 Jan 2009 to 31Dec2010 31 Dec 2009 £000 £000

ExecutiveDirectorsAndrew Cosslett 1,571 827James Abrahamson1 380 –Kirk Kinsell1 436 –Richard Solomons 996 531Non-ExecutiveDirectorsDavid Webster 398 390Graham Allan2 63 –David Kappler 100 95Ralph Kugler 84 80Jennifer Laing3 74 68Jonathan Linen 63 60Ying Yeh 63 60FormerDirectors4 1 1Total 4,229 2,112

1 James Abrahamson and Kirk Kinsell were appointed as Directors on 1 August 2010. The above figures reflect their emoluments as Directors from this date. They are paid in US dollars. The sterling figures above have been calculated using an exchange rate of $1 = £0.65.

2 Graham Allan was appointed as a Director on 1 January 2010.

3 Jennifer Laing became Chairman of the Corporate Responsibility Committee on 1 March 2009, for which a higher fee is paid.

4 Sir Ian Prosser retired as a Director on 31 December 2003. However, he had ongoing healthcare benefit of £1,179 during the year.

Pensions Executive Directors participated in either the executive section of the registered defined benefit InterContinental Hotels UK Pension Plan (the IC Plan) and the InterContinental Executive Top-Up Scheme (ICETUS) (UK-based Directors) or the 401(k) Retirement Plan (401(k)) and the Deferred Compensation Plan (DCP) (US-based Directors).

The executive section of the IC Plan is a funded, registered, final salary, occupational pension scheme. When benefits would otherwise exceed a member’s lifetime allowance, the balance is provided by the ICETUS. The 401(k) is a tax-qualified plan and the DCP is a non-tax qualified plan, both providing benefits on a defined contribution basis, with the member and the relevant company both making contributions.

Andrew Richard Cosslett Solomons UKPlans(finalsalary) £ £

Transfer value of accrued benefits at 1 January 2010 2,574,100 3,934,700Increase in transfer value over the year 864,000 773,700Transfervalueofaccruedbenefitsat31December2010 3,438,100 4,708,400Increase in accrued pension (pa) 23,600 10,400Accrued pension at 31 December 2010 (pa) 161,500 239,200Ageat31December2010 55 49

USPlans(definedcontribution)

The Company contributions made in respect of James Abrahamson and Kirk Kinsell for their periods of service as Directors from 1 August 2010 were £18,000 and £22,300 respectively. Sterling values have been calculated using an exchange rate of $1 = £0.65. Both Messrs Abrahamson and Kinsell were age 55 at 31 December 2010.

Summary remuneration report continued


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Annual Bonus Plan deferred share awardsAll Directors participated in the ABP during the year ended 31 December 2010. No matching shares are provided on awards. Directors’ pre-tax share interests during the year were as follows:

Value based on share ABP ABP price of awards ABP ABP Value at awards 1243p at held at awards during shares vested vesting held at 31 Dec 2010Directors 1 Jan 2010 the year1 during the year £ 31 Dec 2010 £

Andrew Cosslett 231,809 – 55,870 511,021 175,939 2,186,921Total 231,809 175,939 2,186,921James Abrahamson 135,0002 – 45,000 405,032 90,000 1,118,700Total 135,000 90,000 1,118,700Kirk Kinsell 74,768 – 13,610 124,485 61,158 760,194Total 74,768 61,158 760,194Richard Solomons 147,940 – 35,757 327,055 112,183 1,394,435Total 147,940 112,183 1,394,435

1 No annual bonus was payable for the period ended 31 December 2009.

2 James Abrahamson received a special share award as part of his recruitment terms in 2009. Full vesting of these shares is subject to his continued service until February 2012.

Long Term Incentive Plan awardsIn 2010 there were three cycles in operation and one cycle which vested. The awards made to Directors who served during the year ended 31 December 2010 in respect of the performance cycles ending on 31 December 2009, 2010, 2011 and 2012 and the maximum pre-tax number of ordinary shares due if performance targets are achieved in full are set out in the table below. For the cycle ending on 31 December 2010, the Company’s TSR outperformed the Dow Jones World Hotels index by 8 percentage points and achieved 9.6% per annum growth in adjusted EPS. Accordingly, 73.8% of the award will vest on 16 February 2011.

Maximum value based on share Maximum Maximum Market Maximum price of LTIP awards LTIP LTIP price per Value at LTIP awards 1243p at held at shares awarded shares vested share at vesting held at 31 Dec 2010 Directors 1 Jan 2010 during the year during the year vesting £ 31 Dec 2010 £

Andrew Cosslett 685,266 160,807 1 73,372 2 901.5p 661,449 686,567 8,534,027James Abrahamson 386,189 79,0081 37,9432 901.5p 342,056 382,711 4,757,097Kirk Kinsell 263,796 75,411 1 21,685 2 901.5p 195,490 292,064 3,630,356Richard Solomons 436,446 101,818 1 46,9702 901.5p 423,435 436,155 5,421,407Total 1,771,697 417,0441 1,797,497 22,342,887

1 This award is based on performance to 31 December 2012 where the performance measures relate to the Company’s TSR relative to the Dow Jones World Hotels index and the growth in adjusted earnings per share (EPS) over the performance period. James Abrahamson and Kirk Kinsell received their awards prior to appointment as Executive Directors on 1 August 2010.

2 This award was based on performance to 31 December 2009. Performance was measured against both the Company’s TSR relative to a group of eight other comparator companies and cumulative annual growth rate (CAGR) in adjusted EPS over the performance period. The number of shares released was determined according to a) where the Company finished in the TSR comparator group, with 50% of the award being released for first position and 10% of the award being released for median position; and b) the cumulative annual growth in adjusted EPS, with 50% of the award being released for growth of 20% per annum or more and 10% of the award being released for growth of 10% per annum. The Company finished in fourth position in the TSR group and achieved 15.2% per annum adjusted EPS growth. Accordingly, 46% of the award vested on 17 February 2010.

Share optionsBetween 2003 and 2005, grants of options were made under the IHG Executive Share Option Plan. No executive share options have been granted since then. Share options held by Directors who served during the year are summarised as follows:

Share Exercised Executive Weighted options held during options held at average Directors at 1 Jan 2010 the year 31 Dec 2010 option price3

Kirk Kinsell 109,1501 109,1502 531.06pRichard Solomons 330,8701 330,8702 532.36p

1 Executive share options granted in 2004 and 2005.

2 Executive share options granted in 2004 are exercisable up to April 2014. Executive share options granted in 2005 are exercisable up to April 2015.

3 Weighted average option price of options held at 31 December 2010.

No Director exercised share options during the year; therefore there is no disclosable gain by Directors in aggregate for the year ended 31 December 2010 (2009 £437,732).

Summary remuneration report 43

Factsandfigures

Website and electronic communicationAs part of the Company’s commitment to reducing the cost and environmental impact of producing and distributing printed documents in very large quantities, IHG’s Annual Report and Annual Review have been made available to the majority of shareholders through the Company’s website www.ihgplc.com/investors under financial library.

Shareholder Hotel Discount PromotionIHG is currently operating a promotion for discounted hotel stays (subject to availability) for registered shareholders, through a dedicated, controlled access website. For further details please contact the Company Secretariat at the registered office address (details shown on page 45) or email [email protected]

Share price informationThe latest share price is available in the financial press, on Ceefax and on the Financial Times Cityline Service, telephone 09058 171 690 (calls charged at 75p per minute from a BT landline). Further details of the share price may be found on the Company’s website www.ihgplc.com/investors under share price.

Changes to the base cost of IHG sharesDetails of all the changes to the base cost of IHG shares held since April 2003 up to December 2010, for UK Capital Gains Tax purposes, may be found on the Company’s website www.ihgplc.com/investors under shareholder centre/tax information.

Corporate Responsibility ReportIHG has published an online Corporate Responsibility Report for 2010 covering progress on a range of environmental, social and community issues. This is available on our corporate website and can be downloaded directly at www.ihgplc.com/responsibility

RegistrarFor enquiries concerning individual shareholdings, notification of a shareholder’s change of address and for information on a range of shareholder services please contact the Company’s Registrar, Equiniti (details shown on page 45).

Dividend servicesThe Company offers a Dividend Reinvestment Plan (DRIP) for shareholders to purchase additional IHG shares with their cash dividends. For further information about the DRIP, please contact our Registrar helpline on 0871 384 2268†. A DRIP application and information booklet are available on the Company’s website www.ihgplc.com/investors under shareholder centre/dividends.Shareholders who would like their dividends to be paid directly into a bank or building society account, or who wish to amalgamate their shareholder accounts in order to avoid duplicate mailing of shareholder communications should contact our Registrar. It may be possible for shareholders to have their dividends paid direct to their bank account in a local currency. Charges are payable for this service. Further information is available at www.shareview.co.uk under shareholder centre/overseas payment service.If you think that you have out of date dividend warrants or outstanding dividend payments please contact our Registrar for further information.

Individual Savings Accounts (ISAs) Equiniti offer ISAs in IHG shares. For further information please contact our Registrar helpline on 0871 384 2244†.

Share dealing servicesEquiniti offer a postal dealing facility for IHG shares. For more information on this service, call 0871 384 2132†. They also offer a telephone and internet dealing service, Shareview Dealing, which provides a simple and convenient way of buying and selling shares. For telephone dealings call 08456 037 037 between 8.00am and 4.30pm Monday to Friday, and for internet dealings log on to www.shareview.co.uk

ShareGiftThe Orr Mackintosh Foundation operates this charity share donation scheme for shareholders with small holdings of shares, the value of which makes them uneconomic to sell. Details can be obtained from Equiniti, the ShareGift website www.sharegift.org or by calling ShareGift on 020 7930 3737.

Missing shareholdersWorking with ProSearch (an asset reunification company), we continue to look for shareholders who have not kept their contact details up to date. We have funds waiting to be claimed and are committed to doing what we can to pay these to their rightful owners. For further details please contact ProSearch on 01732 741 411 or email [email protected]

Shareholder securityMany companies have become aware that their shareholders have received unsolicited telephone calls or correspondence concerning investment matters. These are typically from overseas-based ‘brokers’ who target UK shareholders, offering to sell them what often turn out to be worthless or high-risk shares in US or UK investments. These operations are commonly known as ‘boiler rooms’. More detailed information on this or similar activity can be found on the Financial Services Authority website www.moneymadeclear.fsa.gov.ukDetails of any share dealing facilities that the Company endorses will be included in Company mailings.

American Depositary Receipts (ADRs) The Company’s shares are listed on the New York Stock Exchange in the form of American Depositary Shares, evidenced by ADRs and traded under the symbol ‘IHG’. Each ADR represents one ordinary share. All enquiries regarding ADR holder accounts and payment of dividends should be directed to JPMorgan Chase & Co, our authorised depositary bank (details shown on page 45). The Company is subject to the reporting requirements of the Securities and Exchange Commission (SEC) in the US and files with the SEC an Annual Report on Form 20-F. The Form 20-F can be found on the Company’s website www.ihgplc.com/investors under shareholder centre/ADR holders or by visiting the SEC’s website www.sec.gov/edgar.shtml

Summary forward-looking statement This Annual Review and Summary Financial Statement contains certain forward-looking statements as defined under US legislation (Section 21E of the Securities Exchange Act of 1934). By their nature, such statements involve uncertainty; as a consequence, actual results and developments may differ materially from those expressed in or implied by such statements. A more detailed explanation of the risks and uncertainties related to forward-looking statements is set out on page 121 of the Annual Report and Financial Statements 2010, copies of which are available from the registered office of the Company (details shown on page 45) or on the Company’s website www.ihgplc.com/investors under shareholder centre/reports.

Investor information


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Investor information, Financial calendar and Contacts 45

2010Payment of interim dividend of 8.0p per share (12.8 cents per ADR) 1 OctoberFinancial year end 31 December

2011Preliminary announcement of annual results 15 FebruaryFinal dividend of 22.0p per share (35.2 cents per ADR): Ex-dividend date 23 March Record date 25 MarchAnnouncement of first quarter results 10 MayAnnual General Meeting 27 MayFinal dividend of 22.0p per share (35.2 cents per ADR): Payment date 3 JuneAnnouncement of interim results 9 AugustInterim dividend: Payment date OctoberAnnouncement of third quarter results 8 NovemberFinancial year end 31 December

2012Preliminary announcement of annual results February

Financial calendar

Contacts

Registered officeBroadwater Park, Denham Buckinghamshire UB9 5HR

Telephone +44 (0) 1895 512 000

Fax +44 (0) 1895 512 101

www.ihg.com

For general information about the Group’s business please contact the Corporate Affairs department at the above address. For all other enquiries please contact the Company Secretariat at the above address.

RegistrarEquiniti, Aspect House Spencer Road, Lancing West Sussex BN99 6DA

Telephone 0871 384 2132*† (UK callers)

+44 (0) 121 415 7034 (non-UK callers)

www.shareview.co.uk *For those with hearing difficulties a text phone is available on 0871 384 2255† for UK callers with compatible equipment. †Telephone calls to these numbers are currently charged at 8p per minute if using a BT landline. Other telephony provider costs may vary.

ADR depositaryJPMorgan Chase & Co PO Box 64504 St. Paul, MN 55164-0504 USA

Telephone +1 800 990 1135 (US callers – toll free)

+1 651 453 2128 (non-US callers)

Email: [email protected] www.adr.com

StockbrokersBank of America Merrill Lynch Goldman Sachs

AuditorsErnst & Young LLP

Investment bankersCiti Bank of America Merrill Lynch Goldman Sachs

SolicitorsFreshfields Bruckhaus Deringer LLP

Priority Club RewardsIf you wish to enquire about, or to join Priority Club Rewards, IHG’s loyalty programme for frequent travellers, please visit www.priorityclub.com or telephone:

0871 226 1111∞ (in Europe, Middle East and Africa) (toll charges apply)

+1 888 211 9874 (in US and Canada) (toll free)

+1 800 272 9273 (in Mexico) (toll free)

+1 801 975 3013 (Spanish) (in Central and South America) (toll charges apply)

+1 801 975 3063 (English) (in Central and South America) (toll charges apply)

+63 2 857 8788 (from most countries in Asia Pacific) (toll charges apply) ∞Telephone calls to this number are charged at 10p per minute. Standard network rates apply. Calls from mobiles will be higher.

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For further information visit www.ihgplc.com/investors

InterContinental Shanghai Expo, China

make a booking atwww.ihg.com

InterContinental Hotels Group PLCBroadwater Park, DenhamBuckinghamshire UB9 5HRUnited Kingdom

Telephone +44 (0) 1895 512 000Fax +44 (0) 1895 512 101

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